RAPPLER, INC., petitioner, vs. ANDRES D. BAUTISTA, respondent congealed in provisions of the Constitution.
gealed in provisions of the Constitution.” Under the present Constitution, this Court has the power to resolve
G.R. No. 222702. April 5, 2016
Copyright Conditions; Intellectual Property Code; The “copyright conditions” refer to the limitations on copyright as
provided under Section 184.1(c) of the Intellectual Property Code (IPC). — The “copyright conditions” refer to the
limitations on copyright as provided under Section 184.1(c) of the Intellectual Property Code (IPC), thus: SEC.  two (2) remedies in determining the existence of any grave abuse of discretion pursuant to this Court’s constitutional
184. Limitations on Copyright.—184.1 Notwithstanding the provisions of Chapter V, the following acts shall not
constitute infringement of copyright: x x x x (c) The reproduction or communication to the public by mass media of
articles on current political, social, economic, scientific or religious topic, lectures, addresses and other works of the
same nature, which are delivered in public if such use is for information purposes and has not been expressly
reserved; Provided, That the source is clearly indicated. (Sec. 11, P.D. No. 49) (Boldfacing and underscoring
supplied) Under this provision, the debates fall under “addresses and other works of the same nature.” Thus, the
copyright conditions for the debates are: (1) the reproduction or communication to the public by mass media of the
debates is for information purposes; (2) the debates have not been expressly reserved by the Lead Networks
(copyright holders); and (3) the source is clearly indicated.
Constitutional Law; Freedom of Speech and of the Press; The freedom of the press to report and disseminate the
live audio of the debates, subject to compliance with Section 184.1(c) of the Intellectual Property Code (IPC), can no
longer be infringed or subject to prior restraint. — Once the conditions imposed under Section 184.1(c) of the IPC
are complied with, the information — in this case the live audio of the debates — now forms part of the public
domain. There is now freedom of the press to report or publicly disseminate the live audio of the debates. In fact,
the MOA recognizes the right of other mass media entities, not parties to the MOA, to reproduce the debates subject
only to the same copyright conditions. The freedom of the press to report and disseminate the live audio of the
debates, subject to compliance with Section 184.1(c) of the IPC, can no longer be infringed or subject to prior
restraint. Such freedom of the press to report and disseminate the live audio of the debates is now protected and
guaranteed under Section 4, Article III of the Constitution, which provides that “[N]o law shall be passed abridging
the freedom x x x of the press.”
Election Law; Through the conduct of the national debates among presidential and vice-presidential candidates, the
electorate will have the “opportunity to be informed of the candidates’ qualifications and track record, platforms and
programs, and their answers to significant issues of national concern.”—The presidential and vice-presidential
debates are held primarily for the benefit of the electorate to assist the electorate in making informed choices on
election day. Through the conduct of the national debates among presidential and vice-presidential candidates, the
electorate will have the “opportunity to be informed of the candidates’ qualifications and track record, platforms and
programs, and their answers to significant issues of national concern.” The political nature of the national debates
and the public’s interest in the wide availability of the information for the voters’ education certainly justify allowing
the debates to be shown or streamed in other websites for wider dissemination, in accordance with the MOA.
LEONEN, J., Concurring Opinion:
Judicial Review; View that under the present Constitution, the Supreme Court (SC) has the power to resolve
controversies involving acts done by any government branch or instrumentality with grave abuse of discretion. —
The Constitution provides for this Court’s expanded power of judicial review “to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.” This proviso was borne out of our country’s experience under Martial Law, to
extend judicial review “to review political discretion that clearly breaches fundamental values and principles
controversies involving acts done by any government branch or instrumentality with grave abuse of discretion.
Same; Certiorari; Prohibition; View that procedurally, our Rules of Court provides for two (2) remedies in
determining the existence of any grave abuse of discretion pursuant to this Court’s constitutional mandate: that is,
the special civil actions for certiorari and prohibition under Rule 65.—Procedurally, our Rules of Court provides for
mandate: that is, the special civil actions for certiorari and prohibition under Rule 65. A petition for certiorari may be
filed “[w]hen any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in
excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction[.]” A
petition for prohibition may be filed “[w]hen the proceedings of any tribunal, corporation, board, officer or person,
whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or
with grave abuse of discretion amounting to lack or excess of jurisdiction[.]”
Same; View that procedural lapses pursuant to the Rules of Court cannot limit the Supreme Court’s (SC’s)
constitutional powers, including its duty to determine the existence of “grave abuse of discretion amounting to lack
or excess of jurisdiction” by any governmental branch or instrumentality.—Procedural lapses pursuant to the Rules of
Court cannot limit this Court’s constitutional powers, including its duty to determine the existence of “grave abuse of
discretion amounting to lack or excess of jurisdiction” by any governmental branch or instrumentality. This
constitutional mandate does not qualify the nature of the action by a governmental branch or instrumentality; thus,
limiting this to only judicial or quasi-judicial actions will be constitutionally suspect. To be sure, Article VIII, Section 1
does not do away with the policy of judicial deference. It cannot be read as license for active interference by this
Court in the acts of other constitutional departments and government organs since judicial review requires the
existence of a justiciable case with a ripe and actual controversy. Further, the existence of “grave abuse of
discretion” requires capriciousness, arbitrariness, and actions without legal or constitutional basis.
Civil Law; Agency; View that the Civil Code provides that “[i]f the agent contracts in the name of the principal,
exceeding the scope of his [or her] authority, and the principal does not ratify the contract, it shall be void if the
party with whom the agent contracted is aware of the limits of the powers granted by the principal[.]”—Even the
Civil Code provides that “[i]f the agent contracts in the name of the principal, exceeding the scope of his [or her]
authority, and the principal does not ratify the contract, it shall be void if the party with whom the agent contracted
is aware of the limits of the powers granted by the principal[.]” There is no showing that a Commission on Elections
resolution explicitly authorizing respondent to enter the Memorandum of Agreement was attached to the Agreement
as to assure the parties of respondent’s authority to sign on behalf of the Commission on Elections. There is also no
showing that the Commission on Elections has resolved to approve or ratify the Memorandum of Agreement
respondent signed.
Arbitration; Supreme Court; Jurisdiction; View that while the Memorandum of Agreement (MOA) includes an
arbitration clause for dispute resolution, the judiciary has the solemn duty in the allocation of constitutional
boundaries and the resolution of conflicting claims on constitutional authority.—While the Memorandum of
Agreement includes an arbitration clause for dispute resolution, the judiciary has the solemn duty in the allocation of
constitutional boundaries and the resolution of conflicting claims on constitutional authority, thus: In cases of
conflict, the judicial department is the only constitutional organ which can be called upon to determine the proper
allocation of powers between the several departments and among the integral or constituent units thereof. . . . The
Constitution sets forth in no uncertain language the restrictions and limitations upon governmental powers and
agencies. If these restrictions and limitations are transcended it would be inconceivable if the Constitution had not
provided for a mechanism by which to direct the course of government along constitutional channels, for then the
distribution of powers would be mere verbiage, the bill of rights mere expressions of sentiment, and the principles of
good government mere political apothegms. Certainly, the limitations and restrictions embodied in our Constitution
are real as they should be in any living constitution[.]
Constitutional Law; Freedom of Speech and of the Press; Right to Peaceably Assemble; View that the Constitution
mandates that “[n]o law shall be passed abridging the freedom of speech, of expression, or of the press, or the right
of the people peaceably to assemble and petition the government for redress of grievances.”—The Constitution
mandates that “[n]o law shall be passed abridging the freedom of speech, of expression, or of the press, or the right
of the people peaceably to assemble and petition the government for redress of grievances.” This proscription
applies not only to legislations but even to governmental acts.
Same; Same; View that the evil sought to be prevented in the protection of free speech is especially grave during
elections. — The evil sought to be prevented in the protection of free speech is especially grave during elections. In
Osmeña v. Commission on Elections, 288 SCRA 447 (1998), this Court mentioned how “discussion of public issues
and debate on the qualifications of candidates in an election are essential to the proper functioning of the
government established by our Constitution.”
Same; Same; View that freedom of speech is affected when government grants benefits to some media outlets, i.e.,
lead networks, while unreasonably denying the same privileges to the others. — Freedom of speech is affected when
government grants benefits to some media outlets, i.e., lead networks, while unreasonably denying the same
privileges to the others. This has the effect of stifling speech especially when the actions of a government agency
such as the Commission on Elections have the effect of endowing a monopoly in the market of free speech. In
Diocese of Bacolod v. Commission on Elections, 747 SCRA 1 (2015), we examined free speech in light of equality in
opportunity and deliberative democracy: The scope of the guarantee of free expression takes into consideration the
constitutional respect for human potentiality and the effect of speech. It valorizes the ability of human beings to
express and their necessity to relate. On the other hand, a complete guarantee must also take into consideration the
effects it will have in a deliberative democracy. Skewed distribution of resources as well as the cultural hegemony of
the majority may have the effect of drowning out the speech and the messages of those in the minority. In a sense,
social inequality does have its effect on the exercise and effect of the guarantee of free speech. Those who have
more will have better access to media that reaches a wider audience than those who have less. Those who espouse
the more popular ideas will have better reception that the subversive and the dissenters of society. To be really
heard and understood, the marginalized view normally undergoes its own degree of struggle.
Same; Same; Commission on Elections; View that the Commission on Elections’ (COMELEC’s) power of supervision
and regulation over media during election period should not be exercised in a way that constricts avenues for public
discourse. — Article II, Section 24 of the Constitution states that “[t]he State recognizes the vital role of
communication and information in nation building.” Article III, Section 7 provides that “[t]he right of the people to
information on matters of public concern shall be recognized.” These provisions create a constitutional framework of
opening all possible and available channels for expression to ensure that information on public matters have the
widest reach. In this age of information technology, media has expanded from traditional print, radio, and television.
Internet has sped data gathering and multiplied the types of output produced. The evolution of multimedia
introduced packaging data into compact packets such as “infographics” and “memes.” Many from this generation no
longer listen to the radio or watch television, and instead are more used to live streaming videos online on their
cellular phones or laptops. Social media newsfeeds allow for real-time posting of video excerpts or “screen caps,”
and engaging comments and reactions that stimulate public discussions on important public matters such as
elections. Article IX-C, Section 4 on the Commission on Elections’ power of supervision or regulation of media,
communication, or information during election period is situated within this context. The Commission on Elections’
power of supervision and regulation over media during election period should not be exercised in a way that
constricts avenues for public discourse.
Same; Same; Prior Restraint; View that any governmental act in prior restraint of speech — that is, any “official
governmental restrictions on the press or other forms of expression in advance of actual publication or
dissemination” — carries a heavy burden of unconstitutionality. — Freedom of expression is a fundamental and
preferred right. Any governmental act in prior restraint of speech — that is, any “official governmental restrictions on
the press or other forms of expression in advance of actual publication or dissemination” — carries a heavy burden
of unconstitutionality. Speech restraint regulation may also be either content-based, “based on the subject matter of
the utterance or speech,” or content-neutral, “merely concerned with the incidents of the speech, or one that merely
controls the time, place or manner, and under well-defined standards.”
SPECIAL CIVIL ACTIONS in the Supreme Court. Certiorari and Prohibition.
The facts are stated in the resolution of the Court.
Jesus M. Disini, Jr. for petitioner.
RESOLUTION
CARPIO, J.:
Petitioner Rappler, Inc. (petitioner) filed a petition for certiorari and prohibition against Andres D. Bautista
(respondent), in his capacity as Chairman of the Commission on Elections (COMELEC). The petition seeks to nullify
Part VI(C), paragraph 19 and Part VI(D), paragraph 20 of the Memorandum of Agreement (MOA) on the 2016
presidential and vice-presidential debates, for being executed without or in excess of jurisdiction or with grave abuse
of discretion amounting to lack or excess of jurisdiction and for violating the fundamental rights of petitioner
protected under the Constitution. The MOA, signed on 13 January 2016, was executed by the COMELEC through its
Chairman, respondent Bautista, and the Kapisanan ng mga Brodkaster ng Pilipinas (KBP), and the various media
networks, namely: ABS-CBN Corporation, GMA Network, Inc., Nine Media Corporation, TV5 Network, Inc., Philstar
Daily, Inc., Philippine Daily Inquirer, Inc., Manila Bulletin Publishing Corporation, Philippine Business Daily Mirror
Publishing, Inc., and petitioner. Under the MOA, the KBP was designated as Debate Coordinator while ABS-CBN,
GMA, Nine Media, and TV5, together with their respective print media partners were designated as Lead Networks.
Petitioner alleged that on 21 September 2015, respondent called for a meeting with various media outlets to discuss
the “PiliPinas 2016 Debates,” for presidential and vice-presidential candidates, which the COMELEC was organizing.
Respondent showed a presentation explaining the framework of the debates, in which there will be three presidential
debates and one vice presidential debate. Respondent proposed that petitioner and Google, Inc. be in charge of
online and social media engagement. Respondent announced during the meeting that KBP will coordinate with all
media entities regarding the organization and conduct of the debates.
On 22 September 2015, petitioner sent a proposed draft for broadcast pool guidelines to COMELEC and the KBP. A
broadcast pool has a common audio and video feed of the debates, and the cost will be apportioned among those
needing access to the same. KBP informed petitioner that the proposal will be discussed in the next meeting.
On 19 October 2015, another meeting was held at the COMELEC office to discuss a draft MOA on the debates. In
the draft, petitioner and Google’s participation were dropped in favor of the online outlets owned by the Lead
Networks. After the meeting, the representatives of the Lead Networks drew lots to determine who will host each leg
of the debates. GMA and its partner Philippine Daily Inquirer sponsored the first presidential debate in Mindanao on
21 February 2016; TV5, Philippine Star, and Businessworld sponsored the second phase of presidential debate in the
Visayas on 20 March 2016; ABS-CBN and Manila Bulletin will sponsor the presidential debate to be held in Luzon on
24 April 2016; and the lone vice-presidential debate will be sponsored by CNN, Business Mirror, and petitioner on 10
April 2016. Petitioner alleged that the draft MOA permitted online streaming, provided proper attribution is given the
Lead Network.
On 12 January 2016, petitioner was informed that the MOA signing was scheduled the following day. Upon
petitioner’s request, the draft MOA was e-mailed to petitioner on the evening of 12 January 2016. Petitioner
communicated with respondent its concerns regarding certain provisions of the MOA particularly regarding online
streaming and the imposition of a maximum limit of two minutes of debate excerpts for news reporting. Respondent
assured petitioner that its concerns will be addressed afterwards, but it has to sign the MOA because time was of the
essence. On 13 January 2016, petitioner, along with other media networks and entities, executed the MOA with the
KBP and the COMELEC for the conduct of the three presidential debates and one vice presidential debate. Petitioner
alleged that it made several communications with respondent and the COMELEC Commissioners regarding its
concerns on some of the MOA provisions, but petitioner received no response. Hence, this petition.
In this petition for certiorari and prohibition, petitioner prays for the Court to render judgment:
a. Declaring null and void, for being unconstitutional, pertinent parts of the Memorandum of Agreement that
violate the rights of the Petitioner, specifically Part VI(C), paragraph 19 and Part VI(D), paragraph 20 [of the MOA];
b. Prohibiting the Respondent from implementing specifically Part VI(C), paragraph 19 and Part VI(D), paragraph
20 of the MOA;
c. Pending resolution of this case, issuing a Preliminary Injunction enjoining the Respondent from implementing
Part VI(C), paragraph 19 and Part VI(D), paragraph 20 of the MOA; and
d. Pending resolution of this case, issuing a Preliminary Mandatory Injunction requiring the Respondent to ensure
an unimpaired and equal access to all mass media, online or traditional, to all the Debates.
Part VI(C), paragraph 19 and Part VI(D), paragraph 20 of the MOA read:
VI. ROLES AND RESPONSIBILITIES OF THE LEAD NETWORKS
xxxx
C. ONLINE STREAMING
xxxx
19. Subject to copyright conditions or separate negotiations with the Lead Networks, allow the debates they have
produced to be shown or streamed on other websites.
D. NEWS REPORTING AND FAIR USE
20. Allow a maximum of two minutes of excerpt from the debates they have produced to be used for news reporting
or fair use by other media or entities as allowed by the copyright law: Provided, that the use of excerpts longer than
two minutes shall be subject to the consent of the Lead Network concerned.
Respondent argues that the petition should be dismissed for its procedural defects. In several cases, this Court has
acted liberally and set aside procedural lapses in cases involving transcendental issues of public interest, especially
when time constraint is a factor to be considered, as in this case. As held in GMA Network, Inc. v. Commission on
Elections:
Respondent claims that certiorari and prohibition are not the proper remedies that petitioners have taken to question
the assailed Resolution of the COMELEC. Technically, respondent may have a point. However, considering the very
important and pivotal issues raised, and the limited time, such technicality should not deter the Court from having to
make the final and definitive pronouncement that everyone else depends for enlightenment and guidance. “[T]his
Court has in the past seen fit to step in and resolve petitions despite their being the subject of an improper remedy,
in view of the public importance of the issues raised therein.
The urgency to resolve this case is apparent considering that the televised debates have already started and only
two of the scheduled four national debates remain to be staged. And considering the importance of the debates in
informing the electorate of the positions of the presidential and vice-presidential candidates on vital issues affecting
the nation, this case falls under the exception laid down in GMA Network, Inc. v. Commission on Elections.
Petitioner is a signatory to the MOA. In fact, the sole vice-presidential debate, to be held in Manila on 10 April 2016,
will be sponsored by CNN Philippines (owned and operated by Nine Media Corporation) and its partners Business
Mirror and petitioner. Petitioner, however, is alleging that it is being discriminated particularly as regards the MOA
provisions on live audio broadcast via online streaming. Petitioner argues that the MOA grants radio stations the
right to simultaneously broadcast live the audio of the debates, even if the radio stations are not obliged to perform
any obligation under the MOA. Yet, this right to broadcast by live streaming online the audio of the debates is denied
petitioner and other online media entities, which also have the capacity to live stream the audio of the debates.
Petitioner insists that it signed the MOA believing in good faith the issues it has raised will be resolved by the
COMELEC.
The provisions on Live Broadcast and Online Streaming under the MOA read:
VI ROLES AND RESPONSIBILITIES OF THE LEAD NETWORKS
xxxx
B1. LIVE BROADCAST
10. Broadcast the debates produced by the Lead Networks in their respective television stations and other news
media platforms;
11. Provide a live feed of the debate to other radio stations, other than those of the Lead Network’s, for
simultaneous broadcast;
12. Provide a live feed of the debates produced by them to radio stations not belonging to any of the Lead
Networks for simultaneous broadcast.
xxxx
C. ONLINE STREAMING
 17. Live broadcast the debates produced by the Lead Networks on their respective websites and social media sites
for free viewing by the public;
18. Maintain a copy of the debate produced by the Lead Network on its online site(s) for free viewing by the public
during the period of elections or longer;
19. Subject to copyright conditions or separate negotiations with the Lead Networks, allow the debates they have
produced to be shown or streamed on other websites. (Boldfacing and underscoring supplied)
Petitioner’s demand to exercise the right to live stream the debates is a contractual right of petitioner under the
MOA.
Under Part VI(C), paragraph 19 of the MOA, the Lead Networks are expressly mandated to “allow the debates they
have produced to be shown or streamed on other websites,” but “subject to copyright conditions or separate
negotiations with the Lead Networks.” The use of the word “or” means that compliance with the “copyright
conditions” is sufficient for petitioner to exercise its right to live stream the debates in its website.
The “copyright conditions” refer to the limitations on copyright as provided under Section 184.1(c) of the Intellectual
Property Code (IPC), thus:
SEC. 184. Limitations on Copyright. —
184.1 Notwithstanding the provisions of Chapter V, the following acts shall not constitute infringement of
copyright:
xxxx
(c) The reproduction or communication to the public by mass media of articles on current political, social,
economic, scientific or religious topic, lectures, addresses and other works of the same nature, which are delivered
in public if such use is for information purposes and has not been expressly reserved; Provided, That the source is
clearly indicated. (Sec. 11, P.D. No. 49) (Boldfacing and underscoring supplied)
Under this provision, the debates fall under “addresses and other works of the same nature.” Thus, the copyright
conditions for the debates are: (1) the reproduction or communication to the public by mass media of the debates is
for information purposes; (2) the debates have not been expressly reserved by the Lead Networks (copyright
holders); and (3) the source is clearly indicated.
Condition 1 is complied because the live streaming by petitioner is obviously for information purposes. Condition 2 is
also complied because Part VI(C), paragraph 19 of the MOA expressly “allow[s] the debates x x x to be shown or
streamed on other websites,” including petitioner’s website. This means that the “reproduction or communication (of
the debates) to the public by mass media x x x has not been expressly reserved” or withheld. Condition 3 is
complied by clearly indicating and acknowledging that the source of the debates is one or more of the Lead
Networks.
Part VI(C), paragraph 19 of the MOA, which expressly allows the debates produced by the Lead Networks to be
shown or streamed on other websites, clearly means that the Lead Networks have not “expressly reserved” or
withheld the use of the debate audio for online streaming. In short, the MOA expressly allows the live streaming of
the debates subject only to compliance with the “copyright conditions.” Once petitioner complies with the copyright
conditions, petitioner can exercise the right to live stream the audio of the debates as expressly allowed by the MOA.
Under the MOA, the Lead Networks are mandated to promote the debates for maximum audience. The MOA
recognizes the public function of the debates and the need for the widest possible dissemination of the debates. The
MOA has not reserved or withheld the reproduction of the debates to the public but has in fact expressly allowed the
reproduction of the debates “subject to copyright conditions.” Thus, petitioner may live stream the debate in its
entirety by complying with the “copyright conditions,” including the condition that “the source is clearly indicated”
and that there will be no alteration, which means that the streaming will include the proprietary graphics used by the
Lead Networks. If petitioner opts for a clean feed without the proprietary graphics used by the Lead Networks, in
order for petitioner to layer its own proprietary graphics and text on the same, then petitioner will have to negotiate
separately with the Lead Networks. Similarly, if petitioner wants to alter the debate audio by deleting the
advertisements, petitioner will also have to negotiate with the Lead Networks.
Once the conditions imposed under Section 184.1(c) of the IPC are complied with, the information — in this case the
live audio of the debates — now forms part of the public domain. There is now freedom of the press to report or
publicly disseminate the live audio of the debates. In fact, the MOA recognizes the right of other mass media
entities, not parties to the MOA, to reproduce the debates subject only to the same copyright conditions. The
freedom of the press to report and disseminate the live audio of the debates, subject to compliance with Section
184.1(c) of the IPC, can no longer be infringed or subject to prior restraint. Such freedom of the press to report and
disseminate the live audio of the debates is now protected and guaranteed under Section 4, Article III of the
Constitution, which provides that “[N]o law shall be passed abridging the freedom x x x of the press.”
The presidential and vice-presidential debates are held primarily for the benefit of the electorate to assist the
electorate in making informed choices on election day. Through the conduct of the national debates among
presidential and vice presidential candidates, the electorate will have the “opportunity to be informed of the
candidates’ qualifications and track record, platforms and programs, and their answers to significant issues of
national concern.”10 The political nature of the national debates and the public’s interest in the wide availability of
the information for the voters’ education certainly justify allowing the debates to be shown or streamed in other
websites for wider dissemination, in accordance with the MOA.
Therefore, the debates should be allowed to be live streamed on other websites, including petitioner’s, as expressly
mandated in Part VI(C), paragraph 19 of the MOA. The respon-
dent, as representative of the COMELEC which provides overall supervision under the MOA, including the power to
“resolve issues that may arise among the parties involved in the organization of the debates,”11 should be directed
by this Court to implement Part VI(C), paragraph 19 of the MOA, which allows the debates to be shown or live
streamed unaltered on petitioner’s and other websites subject to the copyright condition that the source is clearly
indicated.
WHEREFORE, we PARTIALLY GRANT the petition. Respondent Andres D. Bautista, as Chairman of the COMELEC, is
directed to implement Part VI(C), paragraph 19 of the MOA, which allows the debates to be shown or live streamed
unaltered on petitioner’s and other websites subject to the copyright condition that the source is clearly indicated.
Due to the time constraint, this Resolution is immediately executory.
SO ORDERED.
Sereno (CJ.), Velasco, Jr., Leonardo-De Castro, Brion, Peralta, Bersamin, Del Castillo, Perez, Mendoza, Reyes,
Jardeleza and Caguioa, JJ., concur.
Perlas-Bernabe, J., On Official Leave.
Leonen, J., I concur. See Separate Opinion.
Notes. — Prior restraint refers to official governmental restrictions on the press or other forms of expression in
advance of actual publication or dissemination; Not all prior restraints on speech are invalid. (Newsounds
Broadcasting Network, Inc. vs. Dy, 583 SCRA 333 [2009])
A government regulation based on the captive-audience doctrine may not be justified if the supposed “captive
audience” may avoid exposure to the otherwise intrusive speech. (1-United Transport Koalisyon [1-UTAK] vs.
Commission on Elections, 755 SCRA 441 [2015])
——o0o——
IN THE MATTER OF THE CHARGES OF PLAGIARISM, ETC., AGAINST ASSOCIATE JUSTICE MARIANO C.
DEL CASTILLO
A.M. No. 10-7-17-SC. October 12, 2010
Judgments; Words and Phrases; Plagiarism; Plagiarism means the theft of another person’s language, thoughts, or
ideas; The passing off of the work of another as one’s own is thus an indispensable element of plagiarism.—At its
most basic, plagiarism means the theft of another person’s language, thoughts, or ideas. To plagiarize, as it is
commonly understood according to Webster, is “to take (ideas, writings, etc.) from (another) and pass them off as
one’s own.” The passing off of the work of another as one’s own is thus an indispensable element of plagiarism.
Same; Plagiarism; Although Tams himself may have believed that the footnoting in this case was not “an appropriate
form of referencing,” he and petitioners cannot deny that the decision did attribute the source or sources of such
passages; Justice Del Castillo did not pass off Tams’ work as his own.—Petitioners point out that the Vinuya decision
lifted passages from Tams’ book, Enforcing Erga Omnes Obligations in International Law (2006) and used them in
Footnote 69 with what the author thought was a mere generic reference. But, although Tams himself may have
believed that the footnoting in this case was not “an appropriate form of referencing,” he and petitioners cannot
deny that the decision did attribute the source or sources of such passages. Justice Del Castillo did not pass off
Tams’ work as his own. The Justice primarily attributed the ideas embodied in the passages to Bruno Simma, whom
Tams himself credited for them. Still, Footnote 69 mentioned, apart from Simma, Tams’ article as another source of
those ideas.
Same; Same; The statement “See Tams, Enforcing Obligations Erga Omnes in International Law (2005)” in the
Vinuya decision is an attribution no matter if Tams thought that it gave him somewhat less credit than he deserved.
—The Court believes that whether or not the footnote is sufficiently detailed, so as to satisfy the footnoting
standards of counsel for petitioners is not an ethical matter but one concerning clarity of writing. The statement “See
Tams, Enforcing Obligations Erga Omnes in International Law (2005)” in the Vinuya decision is an attribution no
matter if Tams thought that it gave him somewhat less credit than he deserved. Such attribution altogether negates
the idea that Justice Del Castillo passed off the challenged passages as his own.
Same; Same; If the Justice’s citations were imprecise, it would just be a case of bad footnoting rather than one of
theft or deceit.—That it would have been better had Justice Del Castillo used the introductory phrase “cited in”
rather than the phrase “See” would make a case of mere inadvertent slip in attribution rather than a case of
“manifest intellectual theft and outright plagiarism.” If the Justice’s citations were imprecise, it would just be a case
of bad footnoting rather than one of theft or deceit. If it were otherwise, many would be target of abuse for every
editorial error, for every mistake in citing pagination, and for every technical detail of form.
Same; Same; Court adopts the Committee’s finding that the researcher’s explanation regarding the accidental
removal of proper attributions to the three authors is credible.—The Court adopts the Committee’s finding that the
researcher’s explanation regarding the accidental removal of proper attributions to the three authors is credible.
Given the operational properties of the Microsoft program in use by the Court, the accidental decapitation of
attributions to sources of research materials is not remote.
Same; Same; Perjury; Nothing in the July 22 letter supports the charge of false testimony; Justice Del Castillo merely
explained “that there was every intention to attribute all sources whenever due” and that there was never “any
malicious intent to appropriate another’s work as our own,” which as it turns out is a true statement.—But nothing in
the July 22 letter supports the charge of false testimony. Justice Del Castillo merely explained “that there was every
intention to attribute all sources whenever due” and that there was never “any malicious intent to appropriate
another’s work as our own,” which as it turns out is a true statement. He recalled how the Court deliberated upon
the case more than once, prompting major revisions in the draft of the decision. In the process, “(s)ources were re-
studied, discussions modified, passages added or deleted.” Nothing in the letter suggests a cover-up. Indeed, it did
not preclude a researcher’s inadvertent error.
Same; Same; The process of drafting a particular decision for the Court is confidential, which explained his initial
request to be heard on the matter without the attendance of the other parties.—And it is understandable that Justice
Del Castillo did not initially disclose his researcher’s error. He wrote the decision for the Court and was expected to
take full responsibility for any lapse arising from its preparation. What is more, the process of drafting a particular
decision for the Court is confidential, which explained his initial request to be heard on the matter without the
attendance of the other parties.
Same; Same; Plagiarism is essentially a form of fraud where intent to deceive is inherent; Plagiarism presupposes
intent and a deliberate, conscious effort to steal another’s work and pass it off as one’s own.—But petitioners’ theory
ignores the fact that plagiarism is essentially a form of fraud where intent to deceive is inherent. Their theory
provides no room for errors in research, an unrealistic position considering that there is hardly any substantial
written work in any field of discipline that is free of any mistake. The theory places an automatic universal curse
even on errors that, as in this case, have reasonable and logical explanations. Indeed, the 8th edition of Black’s Law
Dictionary defines plagiarism as the “deliberate and knowing presentation of another person’s original ideas or
creative expressions as one’s own.” Thus, plagiarism presupposes intent and a deliberate, conscious effort to steal
another’s work and pass it off as one’s own.
Same; Same; Court said nothing in U.P. Board of Regents that would indicate that an intent to pass off another’s
work as one’s own is not required in plagiarism.—The Court said nothing in U.P. Board of Regents that would
indicate that an intent to pass off another’s work as one’s own is not required in plagiarism. The Court merely
affirmed the academic freedom of a university to withdraw a master’s degree that a student obtained based on
evidence that she misappropriated the work of others, passing them off as her own. This is not the case here since,
as already stated, Justice Del Castillo actually imputed the borrowed passages to others.
Same; Same; Stare Decisis; The judicial system is based on the doctrine of stare decisis, which encourages courts to
cite historical legal data, precedents, and related studies in their decisions.—To paraphrase Bast and Samuels, while
the academic publishing model is based on the originality of the writer’s thesis, the judicial system is based on the
doctrine of stare decisis, which encourages courts to cite historical legal data, precedents, and related studies in
their decisions. The judge is not expected to produce original scholarship in every respect. The strength of a decision
lies in the soundness and general acceptance of the precedents and long held legal opinions it draws from.
Administrative Law; Judges; Only errors that are tainted with fraud, corruption, or malice are subject of disciplinary
action.—On occasions judges and justices have mistakenly cited the wrong sources, failed to use quotation marks,
inadvertently omitted necessary information from footnotes or endnotes. But these do not, in every case, amount to
misconduct. Only errors that are tainted with fraud, corruption, or malice are subject of disciplinary action. This is
not the case here. Justice Del Castillo’s acts or omissions were not shown to have been impelled by any of such
disreputable motives. If the rule were otherwise, no judge or justice, however competent, honest, or dedicated he
may be, can ever hope to retire from the judiciary with an unblemished record.
Same; Same; Assigning cases for study research to a court attorney, the equivalent of a “law clerk” in the United
States Supreme Court, is standard practice in the high courts of all nations.—Assigning cases for study and research
to a court attorney, the equivalent of a “law clerk” in the United States Supreme Court, is standard practice in the
high courts of all nations. This is dictated by necessity. With about 80 to 100 cases assigned to a Justice in our Court
each month, it would be truly senseless for him to do all the studies and research, going to the library, searching the
internet, checking footnotes, and watching the punctuations. If he does all these by himself, he would have to
allocate at least one to two weeks of work for each case that has been submitted for decision. The wheels of justice
in the Supreme Court will grind to a halt under such a proposition.
SERENO, J., Concurring Opinion:
Judgments; Words and Phrases; Plagiarism; The text of the Decision itself reveals the evidence of plagiarism.—The
text of the Decision itself reveals the evidence of plagiarism. The tearful apology of the legal researcher to the family
of the ponente and her acknowledgment of the gravity of the act of omitting attributions is an admission that
something wrong was committed. Her admission that the correct attributions went missing in the process of her
work is an admission of plagiarism. The evidence in the text of the Vinuya Decision and the acknowledgment by the
legal researcher are sufficient for the determination of plagiarism.
Same; Plagiarism; Plagiarism is an act that does not depend merely on the nature of the object, i.e. what is
plagiarized, but also hinges on the process, i.e. what has been done to the object; Plagiarism thus does not consist
solely of using the work of others in one’s own work, but of the former in conjunction with the failure to attribute
said work to its rightful owner and thereby, as in the case of written work, misrepresenting the work of another as
one’s own.—Plagiarism is an act that does not depend merely on the nature of the object, i.e. what is plagiarized,
but also hinges on the process, i.e. what has been done to the object. The elements of this process are the act of
copying the plagiarized work and the subsequent omission in failing to attribute the work to its author. Plagiarism
thus does not consist solely of using the work of others in one’s own work, but of the former in conjunction with the
failure to attribute said work to its rightful owner and thereby, as in the case of written work, misrepresenting the
work of another as one’s own. As the work is another’s and used without attribution, the plagiarist derives the
benefit of use from the plagiarized work without expending the requisite effort for the same—at a cost (as in the
concept of “opportunity cost”) to its author who could otherwise have gained credit for the work and whatever
compensation for its use is deemed appropriate and necessary.
Same; Same; There is no requirement of extent of copying or a minimum number of instances of unattributed usage
for an act to be considered a plagiarist act, nor is the intent to deceive or to copy without attribution a prerequisite
of plagiarism.—If the question of plagiarism, then, turns on a failure of attribution, judicial plagiarism in the case at
bar “arises when judges author opinions that employ materials from copyrighted sources such as law journals or
books, but neglect to give credit to the author.” Doing so effectively implies the staking of a claim on the copied
work as the judge’s own. Note that there is no requirement of extent of copying or a minimum number of instances
of unattributed usage for an act to be considered a plagiarist act, nor is the intent to deceive or to copy without
attribution a prerequisite of plagiarism. In Dursht’s exhaustive analysis of judicial plagiarism she cites the case of
Newman v. Burgin wherein the court said that plagiarism may be done “through negligence or recklessness without
intent to deceive.” Dursht in addition notes that intent may also be taken as the intent to claim authorship of the
copied work, whether or not there was intent to deceive, citing Napolitano v. Trustees of Princeton Univ.
Same; Same; Judicial Plagiarism; Findings of judicial plagiarism do not necessarily carry with them the imposition of
sanctions, nor do they present unequivocal demands for rehearing or the reversal of rulings.—Findings of judicial
plagiarism do not necessarily carry with them the imposition of sanctions, nor do they present unequivocal demands
for rehearing or the reversal of rulings. In Liggett Group, Inc., et al. v. Harold M. Engle, M.D. et al., a U.S. tobacco
class action suit, “[the] plaintiffs’ counsel filed a motion for rehearing alleging that the appellate opinion copied large
portions of the defendants’ briefs. . . . without attribution.” The result of this, the plaintiffs claimed, was the creation
of the “appearance of impropriety,” the abdication of judicative duties, the relinquishing of independence to
defendants, the failure to maintain impartiality, and therefore, as an act of judicial plagiarism, was “a
misrepresentation of the facts found by the trial court and denied plaintiffs due process of law.” The three-judge
panel denied the motion.
Same; Same; Unless reconsidered, the Court would unfortunately be remembered as the Court that made “malicious
intent” an indispensable element of plagiarism and that made computer-keying errors an exculpatory fact in charges
of plagiarism, without clarifying whether its ruling applies only to situations of judicial decision-making or to other
written intellectual activity.—Unless reconsidered, this Court would unfortunately be remembered as the Court that
made “malicious intent” an indispensable element of plagiarism and that made computer-keying errors an
exculpatory fact in charges of plagiarism, without clarifying whether its ruling applies only to situations of judicial
decision-making or to other written intellectual activity. It will also weaken this Court’s disciplinary authority—the
essence of which proceeds from its moral authority—over the bench and bar. In a real sense, this Court has
rendered tenuous its ability to positively educate and influence the future of intellectual and academic discourse.
ADMINISTRATIVE MATTER in the Supreme Court. Plagiarism.
The facts are stated in the opinion of the Court.
PER CURIAM:
This case is concerned with charges that, in preparing a decision for the Court, a designated member plagiarized the
works of certain authors and twisted their meanings to support the decision.
The Background Facts
Petitioners Isabelita C. Vinuya and about 70 other elderly women, all members of the Malaya Lolas Organization,
filed with the Court in G.R. No. 162230 a special civil action of certiorari with application for preliminary mandatory
injunction against the Executive Secretary, the Secretary of Foreign Affairs, the Secretary of Justice, and the Office
of the Solicitor General.
Petitioners claimed that in destroying villages in the Philippines during World War II, the Japanese army
systematically raped them and a number of other women, seizing them and holding them in houses or cells where
soldiers repeatedly ravished and abused them.
Petitioners alleged that they have since 1998 been approaching the Executive Department, represented by the
respondent public officials, requesting assistance in filing claims against the Japanese military officers who
established the comfort women stations. But that Department declined, saying that petitioners’ individual claims had
already been fully satisfied under the Peace Treaty between the Philippines and Japan.
Petitioners wanted the Court to render judgment, compelling the Executive Department to espouse their claims for
official apology and other forms of reparations against Japan before the International Court of Justice and other
international tribunals.
On April 28, 2010, the Court rendered judgment dismissing petitioners’ action. Justice Mariano C. del Castillo wrote
the decision for the Court. The Court essentially gave two reasons for its decision: it cannot grant the petition
because, first, the Executive Department has the exclusive prerogative under the Constitution and the law to
determine whether to espouse petitioners’ claim against Japan; and, second, the Philippines is not under any
obligation in international law to espouse their claims.
On June 9, 2010, petitioners filed a motion for reconsideration of the Court’s decision. More than a month later on
July 18, 2010, counsel for petitioners, Atty. Herminio Harry Roque, Jr., announced in his online blog that his clients
would file a supplemental petition “detailing plagiarism committed by the court” under the second reason it gave for
dismissing the petition and that “these stolen passages were also twisted to support the court’s erroneous
conclusions that the Filipino comfort women of World War Two have no further legal remedies.” The media gave
publicity to Atty. Roque’s announcement.
On July 19, 2010, petitioners filed the supplemental motion for reconsideration that Atty. Roque announced. It
accused Justice Del Castillo of “manifest intellectual theft and outright plagiarism” when he wrote the decision for
the Court and of “twisting the true intents of the plagiarized sources …to suit the arguments of the assailed
Judgment.” They charged Justice Del Castillo of copying without acknowledgement certain passages from three
foreign articles:
a. A Fiduciary Theory of Jus Cogens by Evan J. Criddle and Evan Fox-Descent, Yale Journal of International Law
(2009);
b. Breaking the Silence: Rape as an International Crime by Mark Ellis, Case Western Reserve Journal of
International Law (2006); and
c. Enforcing Erga Omnes Obligations by Christian J. Tams, Cambridge University Press (2005).
Petitioners claim that the integrity of the Court’s deliberations in the case has been put into question by Justice Del
Castillo’s fraud. The Court should thus “address and disclose to the public the truth about the manifest intellectual
theft and outright plagiarism” that resulted in gross prejudice to the petitioners.
Because of the publicity that the supplemental motion for reconsideration generated, Justice Del Castillo circulated a
letter to his colleagues, subsequently verified, stating that when he wrote the decision for the Court he had the
intent to attribute all sources used in it. He said in the pertinent part:
“It must be emphasized that there was every intention to attribute all sources, whenever due. At no point was there
ever any malicious intent to appropriate another’s work as our own. We recall that this ponencia was thrice included
in the Agenda of the Court en banc. It was deliberated upon during the Baguio session on April 13, 2010, April 20,
2010 and in Manila on April 27, 2010. Each time, suggestions were made which necessitated major revisions in the
draft. Sources were re-studied, discussions modified, passages added or deleted. The resulting decision comprises
34 pages with 78 footnotes.
xxxx
As regards the claim of the petitioners that the concepts as contained in the above foreign materials were “twisted,”
the same remains their opinion which we do not necessarily share.”
On July 27, 2010, the Court En Banc referred the charges against Justice Del Castillo to its Committee on Ethics and
Ethical Standards, chaired by the Chief Justice, for investigation and recommendation. The Chief Justice designated
retired Justice Jose C. Vitug to serve as consultant of the Committee. He graciously accepted.
On August 2, 2010, the Committee directed petitioners to comment on Justice Del Castillo’s verified letter. When this
was done, it set the matter for hearing.
In the meantime, on July 19, 2010, Evan Criddle wrote on his blog that he and his co-author Evan Fox-Descent
(referred to jointly as Criddle-Descent) learned of alleged plagiarism involving their work but Criddle’s concern, after
reading the supplemental motion for reconsideration, was the Court’s conclusion that prohibitions against sexual
slavery are not jus cogens or internationally binding norms that treaties cannot diminish.
On July 23, 2010, Dr. Mark Ellis wrote the Court expressing concern that in mentioning his work, the Court “may
have misread the argument [he] made in the article and employed them for cross purposes.” Dr. Ellis said that he
wrote the article precisely to argue for appropriate legal remedy for victims of war crimes.
On August 8, 2010, after the referral of the matter to the Committee for investigation, the Dean of the University of
the Philippines (U.P.) College of Law publicized a Statement from his faculty, claiming that the Vinuya decision was
“an extraordinary act of injustice” and a “singularly reprehensible act of dishonesty and misrepresentation by the
Highest Court of the land.” The statement said that Justice Del Castillo had a “deliberate intention to appropriate the
original authors’ work,” and that the Court’s decision amounted to “an act of intellectual fraud by copying works in
order to mislead and deceive.”
On August 18, 2010 Mr. Christian J. Tams wrote Chief Justice Renato C. Corona that, although relevant sentences in
the Court’s decision were taken from his work, he was given generic reference only in the footnote and in connection
with a citation from another author (Bruno Simma) rather than with respect to the passages taken from his work. He
thought that the form of referencing was inappropriate. Mr. Tams was also concerned that the decision may have
used his work to support an approach to erga omnes concept (obligations owed by individual States to the
community of nations) that is not consistent with what he advocated.
On August 26, 2010, the Committee heard the parties’ submissions in the summary manner of administrative
investigations. Counsels from both sides were given ample time to address the Committee and submit their
evidence. The Committee queried them on these.
Counsels for Justice Del Castillo later asked to be heard with the other parties not in attendance so they could make
submissions that their client regarded as sensitive and confidential, involving the drafting process that went into the
making of the Court’s decision in the Vinuya case. Petitioners’ counsels vigorously objected and the Committee
sustained the objection. After consulting Justice Del Castillo, his counsels requested the Committee to hear the
Justice’s court researcher, whose name need not be mentioned here, explain the research work that went into the
making of the decision in the Vinuya case. The Committee granted the request.
The researcher demonstrated by Power Point presentation how the attribution of the lifted passages to the writings
of Criddle-Descent and Ellis, found in the beginning drafts of her report to Justice Del Castillo, were unintentionally
deleted. She tearfully expressed remorse at her “grievous mistake” and grief for having “caused an enormous
amount of suffering for Justice Del Castillo and his family.” On the other hand, addressing the Committee in reaction
to the researcher’s explanation, counsel for petitioners insisted that lack of intent is not a defense in plagiarism since
all that is required is for a writer to acknowledge that certain words or language in his work were taken from
another’s work. Counsel invoked the Court’s ruling in University of the Philippines Board of Regents v. Court of
Appeals and Arokiaswamy William Margaret Celine, arguing that standards on plagiarism in the academe should
apply with more force to the judiciary.
After the hearing, the Committee gave the parties ten days to file their respective memoranda. They filed their
memoranda in due course. Subsequently after deliberation, the Committee submitted its unanimous findings and
recommendations to the Court.
The Issues
This case presents two issues:
1. Whether or not, in writing the opinion for the Court in the Vinuya case, Justice Del Castillo plagiarized the
published works of authors Tams, Criddle-Descent, and Ellis.
2. Whether or not Justice Del Castillo twisted the works of these authors to make it appear that such works
supported the Court’s position in the Vinuya decision.
The Court’s Rulings
Because of the pending motion for reconsideration in the Vinuya case, the Court like its Committee on Ethics and
Ethical Standards will purposely avoid touching the merits of the Court’s decision in that case or the soundness or
lack of soundness of the position it has so far taken in the same. The Court will deal, not with the essential merit or
persuasiveness of the foreign author’s works, but how the decision that Justice Del Castillo wrote for the Court
appropriated parts of those works and for what purpose the decision employed the same.
At its most basic, plagiarism means the theft of another person’s language, thoughts, or ideas. To plagiarize, as it is
commonly understood according to Webster, is “to take (ideas, writings, etc.) from (another) and pass them off as
one’s own.” The passing off of the work of another as one’s own is thus an indispensable element of plagiarism.
The Passages from Tams
Petitioners point out that the Vinuya decision lifted passages from Tams’ book, Enforcing Erga Omnes Obligations in
International Law (2006) and used them in Footnote 69 with what the author thought was a mere generic reference.
But, although Tams himself may have believed that the footnoting in this case was not “an appropriate form of
referencing,” he and petitioners cannot deny that the decision did attribute the source or sources of such passages.
Justice Del Castillo did not pass off Tams’ work as his own. The Justice primarily attributed the ideas embodied in
the passages to Bruno Simma, whom Tams himself credited for them. Still, Footnote 69 mentioned, apart from
Simma, Tams’ article as another source of those ideas.
The Court believes that whether or not the footnote is sufficiently detailed, so as to satisfy the footnoting standards
of counsel for petitioners is not an ethical matter but one concerning clarity of writing. The statement “See Tams,
Enforcing Obligations Erga Omnes in International Law (2005)” in the Vinuya decision is an attribution no matter if
Tams thought that it gave him somewhat less credit than he deserved. Such attribution altogether negates the idea
that Justice Del Castillo passed off the challenged passages as his own.
That it would have been better had Justice Del Castillo used the introductory phrase “cited in” rather than the phrase
“See” would make a case of mere inadvertent slip in attribution rather than a case of “manifest intellectual theft and
outright plagiarism.” If the Justice’s citations were imprecise, it would just be a case of bad footnoting rather than
one of theft or deceit. If it were otherwise, many would be target of abuse for every editorial error, for every
mistake in citing pagination, and for every technical detail of form.
The Passages from Ellis and Criddle-Descent
Petitioners also attack the Court’s decision for lifting and using as footnotes, without attribution to the author,
passages from the published work of Ellis. The Court made the following statement on page 27 of its decision,
marked with Footnote 65 at the end:
“We fully agree that rape, sexual slavery, torture, and sexual violence are morally reprehensible as well as legally
prohibited under contemporary international law. 65 x x x”
Footnote 65 appears down the bottom of the page. Since the lengthy passages in that footnote came almost
verbatim from Ellis’ article, such passages ought to have been introduced by an acknowledgement that they are
from that article. The footnote could very well have read:
65 In an article, Breaking the Silence: Rape as an International Crime, Case Western Reserve Journal of
International Law (2006), Mark Ellis said: The concept of rape as an international crime is relatively new. This is not
to say that rape has never been historically prohibited, particularly in war. But modern-day sensitivity to the crime of
rape did not emerge until after World War II. In the Nuremberg Charter, the word rape was not mentioned. The
article on crimes against humanity explicitly set forth prohibited acts, but rape was not mentioned by name. (For
example, the Treaty of Amity and Commerce between Prussia and the United States provides that in time of war all
women and children “shall not be molested in their persons.” The Treaty of Amity and Commerce, Between his
Majesty the King of Prussia and the United States of America, art. 23, Sept. 10, 1785, U.S.-Pruss., 8 Treaties & Other
Int’l Agreements Of The U.S. 78, 85. The 1863 Lieber Instructions classified rape as a crime of “troop discipline.”
(Mitchell, The Prohibition of Rape in International Humanitarian Law as a Norm of Jus cogens: Clarifying the
Doctrine, 15 Duke J. Comp. Int’l. L. 219, 224). It specified rape as a capital crime punishable by the death penalty
(Id., at p. 236). The 1907 Hague Convention protected women by requiring the protection of their “honour.”
(“Family honour and rights, the lives of persons, and private property, as well as religious convictions and practice,
must be respected.” Convention (IV) Respecting the Laws & Customs of War on Land, art. 46, Oct. 18, 1907.
General Assembly resolution 95 (I) of December 11, 1946 entitled, “Affirmation of the Principles of International Law
recognized by the Charter of the Nürnberg Tribunal”; General Assembly document A/64/Add.1 of 1946; See
Agreement for the Prosecution and Punishment of the Major War Criminals of the European Axis, Aug. 8, 1945, 59
Stat. 1544, 82 U.N.T.S. 279. Article 6(c) of the Charter established crimes against humanity as the following:
CRIMES AGAINST HUMANITY: namely, murder, extermination, enslavement, deportation, and other inhumane acts
committed against any civilian population, before or during the war, or persecutions on political, racial or religious
grounds in execution of or in connection with any crime within the Jurisdiction of the Tribunal, whether or not in
violation of the domestic law of the country where perpetrated.
The Nuremberg Judgment did not make any reference to rape and rape was not prosecuted. (Judge Gabrielle Kirk
McDonald, The International Criminal Tribunals Crime and Punishment in the International Arena, 7 ILSA J. Int’l.
Comp. L. 667, 676.) However, International Military Tribunal for the Far East prosecuted rape crimes, even though
its Statute did not explicitly criminalize rape. The Far East Tribunal held General Iwane Matsui, Commander
Shunroku Hata and Foreign Minister Hirota criminally responsible for a series of crimes, including rape, committed by
persons under their authority. (The Tokyo Judgment: Judgment Of The International Military Tribunal For The Far
East 445-54 (1977).
The first mention of rape as a specific crime came in December 1945 when Control Council Law No. 10 included the
term rape in the definition of crimes against humanity. Law No. 10, adopted by the four occupying powers in
Germany, was devised to establish a uniform basis for prosecuting war criminals in German courts. (Control Council
for Germany, Law No. 10: Punishment of Persons Guilty of War Crimes, Crimes Against Peace and Against Humanity,
Dec. 20, 1945, 3 Official Gazette Control Council for Germany 50, 53 (1946))
The 1949 Geneva Convention Relative to the Treatment of Prisoners of War was the first modern-day international
instrument to establish protections against rape for women. Geneva Convention Relative to the Protection of Civilian
Persons in Time of War, Aug. 12, 1949, art. 27, 6 U.S.T. 3316, 75 U.N.T.S. 287 (entry into force Oct. 20, 1950)
[hereinafter Fourth Geneva Convention].Furthermore, the ICC, the ICTY, and the International Criminal Tribunal for
Rwanda (ICTR) have significantly advanced the crime of rape by enabling it to be prosecuted as genocide, a war
crime, and a crime against humanity.”
But, as it happened, the acknowledgment above or a similar introduction was missing from Footnote 65.
Next, petitioners also point out that the following eight sentences and their accompanying footnotes appear in text
on pages 30-32 of the Vinuya decision:
“x x x In international law, the term “jus cogens” (literally, “compelling law”) refers to norms that command
peremptory authority, superseding conflicting treaties and custom. Jus cogens norms are considered peremptory in
the sense that they are mandatory, do not admit derogation, and can be modified only by general international
norms of equivalent authority.71
Early strains of the jus cogens doctrine have existed since the 1700s,72 but peremptory norms began to attract
greater scholarly attention with the publication of Alfred von Verdross’s influential 1937 article, Forbidden Treaties in
International Law.73 The recognition of jus cogens gained even more force in the 1950s and 1960s with the ILC’s
preparation of the Vienna Convention on the Law of Treaties (VCLT).74 Though there was a consensus that certain
international norms had attained the status of jus cogens,75 the ILC was unable to reach a consensus on the proper
criteria for identifying peremptory norms.
After an extended debate over these and other theories of jus cogens, the ILC concluded ruefully in 1963 that “there
is not as yet any generally accepted criterion by which to identify a general rule of international law as having the
character of jus cogens.”76 In a commentary accompanying the draft convention, the ILC indicated that “the
prudent course seems to be to x x x leave the full content of this rule to be worked out in State practice and in the
jurisprudence of international tribunals.”77 Thus, while the existence of jus cogens in international law is undisputed,
no consensus exists on its substance, beyond a tiny core of principles and rules.”78
Admittedly, the Vinuya decision lifted the above, including their footnotes, from Criddle-Descent’s article, A Fiduciary
Theory of Jus Cogens. Criddle-Descent’s footnotes were carried into the Vinuya decision’s own footnotes but no
attributions were made to the two authors in those footnotes.
The Explanation
Unless amply explained, the above lifting from the works of Ellis and Criddle-Descent could be construed as
plagiarism. But one of Justice Del Castillo’s researchers, a court-employed attorney, explained how she accidentally
deleted the attributions, originally planted in the beginning drafts of her report to him, which report eventually
became the working draft of the decision. She said that, for most parts, she did her research electronically. For
international materials, she sourced these mainly from Westlaw, an online research service for legal and law-related
materials to which the Court subscribes.
In the old days, the common practice was that after a Justice would have assigned a case for study and report, the
researcher would source his materials mostly from available law books and published articles on print. When he
found a relevant item in a book, whether for one side of the issue or for the other, he would place a strip of paper
marker on the appropriate page, pencil mark the item, and place the book on his desk where other relevant books
would have piled up. He would later paraphrase or copy the marked out passages from some of these books as he
typed his manuscript on a manual typewriter. This occasion would give him a clear opportunity to attribute the
materials used to their authors or sources.
With the advent of computers, however, as Justice Del Castillo’s researcher also explained, most legal references,
including the collection of decisions of the Court, are found in electronic diskettes or in internet websites that offer
virtual libraries of books and articles. Here, as the researcher found items that were relevant to her assignment, she
downloaded or copied them into her “main manuscript,” a smorgasbord plate of materials that she thought she
might need. The researcher’s technique in this case is not too far different from that employed by a carpenter. The
carpenter first gets the pieces of lumber he would need, choosing the kinds and sizes suitable to the object he has in
mind, say a table. When ready, he would measure out the portions he needs, cut them out of the pieces of lumber
he had collected, and construct his table. He would get rid of the scraps.
Here, Justice Del Castillo’s researcher did just that. She electronically “cut” relevant materials from books and
journals in the Westlaw website and “pasted” these to a “main manuscript” in her computer that contained the
issues for discussion in her proposed report to the Justice. She used the Microsoft Word program. Later, after she
decided on the general shape that her report would take, she began pruning from that manuscript those materials
that did not fit, changing the positions in the general scheme of those that remained, and adding and deleting
paragraphs, sentences, and words as her continuing discussions with Justice Del Castillo, her chief editor,
demanded. Parenthetically, this is the standard scheme that computer-literate court researchers use everyday in
their work.
Justice Del Castillo’s researcher showed the Committee the early drafts of her report in the Vinuya case and these
included the passages lifted from the separate articles of Criddle-Descent and of Ellis with proper attributions to
these authors. But, as it happened, in the course of editing and cleaning up her draft, the researcher accidentally
deleted the attributions.
First Finding
The Court adopts the Committee’s finding that the researcher’s explanation regarding the accidental removal of
proper attributions to the three authors is credible. Given the operational properties of the Microsoft program in use
by the Court, the accidental decapitation of attributions to sources of research materials is not remote.
For most senior lawyers and judges who are not computer literate, a familiar example similar to the circumstances of
the present case would probably help illustrate the likelihood of such an accident happening. If researcher X, for
example, happens to be interested in “the inalienable character of juridical personality” in connection with an
assignment and if the book of the learned Civilist, Arturo M. Tolentino, happens to have been published in a website,
researcher X would probably show interest in the following passage from that book:
“x x x Both juridical capacity and capacity to act are not rights, but qualities of persons; hence, they
cannot be alienated or renounced.15
xxx
_____________________________
15 3 Von Tuhr 296; 1 Valverde 291.
Because the sentence has a footnote mark (#15) that attributes the idea to other sources, it is evident
that Tolentino did not originate it. The idea is not a product of his intellect. He merely lifted it from Von
Tuhr and Valverde, two reputable foreign authors.
When researcher X copies and pastes the above passage and its footnote into a manuscript-in-the-
making in his computer, the footnote number would, given the computer program in use, automatically
change and adjust to the footnoting sequence of researcher X’s manuscript. Thus, if the preceding
footnote in the manuscript when the passage from Tolentino was pasted on it is 23, Tolentino’s footnote
would automatically change from the original Footnote 15 to Footnote 24.
But then, to be of use in his materials-gathering scheme, researcher X would have to tag the Tolentino
passage with a short description of its subject for easy reference. A suitable subject description would
be: “The inalienable character of juridical personality.23” The footnote mark, 23 From Tolentino, which
researcher X attaches to the subject tag, serves as reminder to him to attribute the passage in its final
form to Tolentino. After the passage has been tagged, it would now appear like this:
The inalienable character of juridical personality.23
x x x Both juridical capacity and capacity to act are not rights, but qualities of persons; hence, they
cannot be alienated or renounced.24
xxx
_____________________________
23 From Tolentino.
24 3 Von Tuhr 296; 1 Valverde 291.
The tag is of course temporary and would later have to go. It serves but a marker to help researcher X
maneuver the passage into the right spot in his final manuscript.
The mistake of Justice Del Castillo’s researcher is that, after the Justice had decided what texts,
passages, and citations were to be retained including those from Criddle-Descent and Ellis, and when
she was already cleaning up her work and deleting all subject tags, she unintentionally deleted the
footnotes that went with such tags—with disastrous effect.
To understand this, in Tolentino’s example, the equivalent would be researcher X’s removal during
cleanup of the tag, “The inalienable character of juridical personality 23,” by a simple “delete” operation,
and the unintended removal as well of the accompanying footnote (#23). The erasure of the footnote
eliminates the link between the lifted passage and its source, Tolentino’s book. Only the following would
remain in the manuscript:
x x x Both juridical capacity and capacity to act are not rights, but qualities of persons; hence, they
cannot be alienated or renounced.43
_________________________________
43 3 Von Tuhr 296; 1 Valverde 291.
As it happened, the Microsoft word program does not have a function that raises an alarm when original materials
are cut up or pruned. The portions that remain simply blend in with the rest of the manuscript, adjusting the
footnote number and removing any clue that what should stick together had just been severed.
This was what happened in the attributions to Ellis and Criddle-Descent. The researcher deleted the subject tags
and, accidentally, their accompanying footnotes that served as reminder of the sources of the lifted passages. With
119 sources cited in the decision, the loss of the 2 of them was not easily detectable.
Petitioners point out, however, that Justice Del Castillo’s verified letter of July 22, 2010 is inconsistent with his
researcher’s claim that the omissions were mere errors in attribution. They cite the fact that the Justice did not
disclose his researcher’s error in that letter despite the latter’s confession regarding her mistake even before the
Justice sent his letter to the Chief Justice. By denying plagiarism in his letter, Justice Del Castillo allegedly perjured
himself and sought to whitewash the case.
But nothing in the July 22 letter supports the charge of false testimony. Justice Del Castillo merely explained “that
there was every intention to attribute all sources whenever due” and that there was never “any malicious intent to
appropriate another’s work as our own,” which as it turns out is a true statement. He recalled how the Court
deliberated upon the case more than once, prompting major revisions in the draft of the decision. In the process,
“(s)ources were re-studied, discussions modified, passages added or deleted.” Nothing in the letter suggests a
cover-up. Indeed, it did not preclude a researcher’s inadvertent error.
And it is understandable that Justice Del Castillo did not initially disclose his researcher’s error. He wrote the decision
for the Court and was expected to take full responsibility for any lapse arising from its preparation. What is more,
the process of drafting a particular decision for the Court is confidential, which explained his initial request to be
heard on the matter without the attendance of the other parties.
Notably, neither Justice Del Castillo nor his researcher had a motive or reason for omitting attribution for the lifted
passages to Criddle-Descent or to Ellis. The latter authors are highly respected professors of international law. The
law journals that published their works have exceptional reputations. It did not make sense to intentionally omit
attribution to these authors when the decision cites an abundance of other sources. Citing these authors as the
sources of the lifted passages would enhance rather than diminish their informative value. Both Justice Del Castillo
and his researcher gain nothing from the omission. Thus, the failure to mention the works of Criddle-Decent and Ellis
was unquestionably due to inadvertence or pure oversight.
Petitioners of course insist that intent is not material in committing plagiarism since all that a writer has to do, to
avoid the charge, is to enclose lifted portions with quotation marks and acknowledge the sources from which these
were taken. Petitioners point out that the Court should apply to this case the ruling in University of the Philippines
Board of Regents v. Court of Appeals and Arokiaswamy William Margaret Celine.15 They argue that standards on
plagiarism in the academe should apply with more force to the judiciary.
But petitioners’ theory ignores the fact that plagiarism is essentially a form of fraud where intent to deceive is
inherent. Their theory provides no room for errors in research, an unrealistic position considering that there is hardly
any substantial written work in any field of discipline that is free of any mistake. The theory places an automatic
universal curse even on errors that, as in this case, have reasonable and logical explanations.
Indeed, the 8th edition of Black’s Law Dictionary defines plagiarism as the “deliberate and knowing presentation of
another person’s original ideas or creative expressions as one’s own.” Thus, plagiarism presupposes intent and a
deliberate, conscious effort to steal another’s work and pass it off as one’s own.
Besides, the Court said nothing in U.P. Board of Regents that would indicate that an intent to pass off another’s work
as one’s own is not required in plagiarism. The Court merely affirmed the academic freedom of a university to
withdraw a master’s degree that a student obtained based on evidence that she misappropriated the work of others,
passing them off as her own. This is not the case here since, as already stated, Justice Del Castillo actually imputed
the borrowed passages to others.
Second Finding
The Court also adopts the Committee’s finding that the omission of attributions to Criddle-Descent and Ellis did not
bring about an impression that Justice Del Castillo himself created the passages that he lifted from their published
articles. That he merely got those passages from others remains self-evident, despite the accidental deletion. The
fact is that he still imputed the passages to the sources from which Criddle-Descent and Ellis borrowed them in the
first place.
This is best illustrated in the familiar example above. After the deletion of the subject tag and, accidentally, its
footnote which connects to the source, the lifted passage would appear like this:
“x x x Both juridical capacity and capacity to act are not rights, but qualities of persons; hence, they
cannot be alienated or renounced.43
_____________________________
43 3 Von Tuhr 296; 1 Valverde 291.
Although the unintended deletion severed the passage’s link to Tolentino, the passage remains to be attributed to
Von Tuhr and Valverde, the original sources that Tolentino himself cites. The text and its footnote reference cancel
out any impression that the passage is a creation of researcher X. It is the same with the passages from Criddle-
Descent and Ellis. Because such passages remained attributed by the footnotes to the authors’ original sources, the
omission of attributions to Criddle-Descent and Ellis gave no impression that the passages were the creations of
Justice Del Castillo. This wholly negates the idea that he was passing them off as his own thoughts.
True the subject passages in this case were reproduced in the Vinuya decision without placing them in quotation
marks. But such passages are much unlike the creative line from Robert Frost, “The woods are lovely, dark, and
deep, but I have promises to keep, and miles to go before I sleep, and miles to go before I sleep.” The passages
here consisted of common definitions and terms, abridged history of certain principles of law, and similar frequently
repeated phrases that, in the world of legal literature, already belong to the public realm.
To paraphrase Bast and Samuels,18 while the academic publishing model is based on the originality of the writer’s
thesis, the judicial system is based on the doctrine of stare decisis, which encourages courts to cite historical legal
data, precedents, and related studies in their decisions. The judge is not expected to produce original scholarship in
every respect. The strength of a decision lies in the soundness and general acceptance of the precedents and long
held legal opinions it draws from.
Third Finding
Petitioners allege that the decision twisted the passages from Tams, Criddle-Descent, and Ellis. The Court adopts the
Committee’s finding that this is not so. Indeed, this allegation of twisting or misrepresentation remains a mystery to
the Court. To twist means “to distort or pervert the meaning of.” For example, if one lifts the lyrics of the National
Anthem, uses it in his work, and declares that Jose Palma who wrote it “did not love his country,” then there is
“twisting” or misrepresentation of what the anthem’s lyrics said. Here, nothing in the Vinuya decision said or implied
that, based on the lifted passages, authors Tams, Criddle-Descent, and Ellis supported the Court’s conclusion that
the Philippines is not under any obligation in international law to espouse Vinuya et al.’s claims.
The fact is that, first, since the attributions to Criddle-Descent and Ellis were accidentally deleted, it is impossible for
any person reading the decision to connect the same to the works of those authors as to conclude that in writing the
decision Justice Del Castillo “twisted” their intended messages. And, second, the lifted passages provided mere
background facts that established the state of international law at various stages of its development. These are
neutral data that could support conflicting theories regarding whether or not the judiciary has the power today to
order the Executive Department to sue another country or whether the duty to prosecute violators of international
crimes has attained the status of jus cogens.
Considering how it was impossible for Justice Del Castillo to have twisted the meaning of the passages he lifted from
the works of Tams, Criddle-Descent, and Ellis, the charge of “twisting” or misrepresentation against him is to say the
least, unkind. To be more accurate, however, the charge is reckless and obtuse.
No Misconduct
On occasions judges and justices have mistakenly cited the wrong sources, failed to use quotation marks,
inadvertently omitted necessary information from footnotes or endnotes. But these do not, in every case, amount to
misconduct. Only errors that are tainted with fraud, corruption, or malice are subject of disciplinary action. This is
not the case here. Justice Del Castillo’s acts or omissions were not shown to have been impelled by any of such
disreputable motives. If the rule were otherwise, no judge or justice, however competent, honest, or dedicated he
may be, can ever hope to retire from the judiciary with an unblemished record.
No Inexcusable Negligence
Finally, petitioners assert that, even if they were to concede that the omission was the result of plain error, Justice
Del Castillo is nonetheless guilty of gross inexcusable negligence. They point out that he has full control and
supervision over his researcher and should not have surrendered the writing of the decision to the latter.
But this assumes that Justice Del Castillo abdicated the writing of the Vinuya decision to his researcher, which is
contrary to the evidence adduced during the hearing. As his researcher testified, the Justice set the direction that
the research and study were to take by discussing the issues with her, setting forth his position on those issues, and
reviewing and commenting on the study that she was putting together until he was completely satisfied with it. In
every sense, Justice Del Castillo was in control of the writing of the report to the Court, which report eventually
became the basis for the decision, and determined its final outcome.
Assigning cases for study and research to a court attorney, the equivalent of a “law clerk” in the United States
Supreme Court, is standard practice in the high courts of all nations. This is dictated by necessity. With about 80 to
100 cases assigned to a Justice in our Court each month, it would be truly senseless for him to do all the studies and
research, going to the library, searching the internet, checking footnotes, and watching the punctuations. If he does
all these by himself, he would have to allocate at least one to two weeks of work for each case that has been
submitted for decision. The wheels of justice in the Supreme Court will grind to a halt under such a proposition.
What is important is that, in this case, Justice Del Castillo retained control over the writing of the decision in the
Vinuya case without, however, having to look over his researcher’s shoulder as she cleaned up her draft report to
ensure that she hit the right computer keys. The Justice’s researcher was after all competent in the field of
assignment given her. She finished law from a leading law school, graduated third in her class, served as Editor-in
Chief of her school’s Law Journal, and placed fourth in the bar examinations when she took it. She earned a master’s
degree in International Law and Human Rights from a prestigious university in the United States under the Global-
Hauser program, which counsel for petitioners concedes to be one of the top post-graduate programs on
International Law in the world. Justice Del Castillo did not exercise bad judgment in assigning the research work in
the Vinuya case to her.
Can errors in preparing decisions be prevented? Not until computers cease to be operated by human beings who are
vulnerable to human errors. They are hypocrites who believe that the courts should be as error-free as they
themselves are.
Incidentally, in the course of the submission of petitioners’ exhibits, the Committee noted that petitioners’ Exhibit J,
the accusing statement of the Faculty of the U.P. College of Law on the allegations of plagiarism and
misinterpretation, was a mere dummy. The whole of the statement was reproduced but the signatures portion below
merely listed the names of 38 faculty members, in solid rows, with the letters “Sgd” or “signed” printed beside the
names without exception. These included the name of retired Supreme Court Justice Vicente V. Mendoza, a U.P.
professor.
Because the Committee declined to admit a mere dummy of Exhibit “J”, it directed Atty. Roque to present the signed
copy within three days of the August 26 hearing. He complied. As it turned out, the original statement was signed by
only a minority of the faculty members on the list. The set of signatories that appeared like solid teeth in the dummy
turned out to be broken teeth in the original. Since only 37 out of the 81 on the list signed the document, it does not
appear to be a statement of the Faculty but of just some of its members. And retired Justice V. V. Mendoza did not
sign the statement, contrary to what the dummy represented. The Committee wondered why the Dean submitted a
dummy of the signed document when U.P. has an abundance of copying machines.
Since the above circumstances appear to be related to separate en banc matter concerning the supposed Faculty
statement, there is a need for the Committee to turn over the signed copy of the same to the en banc for its
consideration in relation to that matter.
WHEREFORE, in view of all of the above, the Court:
1. DISMISSES for lack of merit petitioner Vinuya, et al.’s charges of plagiarism, twisting of cited materials, and
gross neglect against Justice Mariano C. del Castillo;
2. DIRECTS the Public Information Office to send copies of this decision to Professors Evan J. Criddle and Evan
Fox-Descent, Dr. Mark Ellis, and Professor Christian J. Tams at their known addresses;
3. DIRECTS the Clerk of Court to provide all court attorneys involved in legal research and reporting with copies of
this decision and to enjoin them to avoid editing errors committed in the Vinuya case while using the existing
computer program especially when the volume of citations and footnoting is substantial; and
4. Finally, DIRECTS the Clerk of Court to acquire the necessary software for use by the Court that can prevent
future lapses in citations and attributions.
Further, the Court DIRECTS the Committee on Ethics and Ethical Standards to turn over to the en banc the dummy
as well as the signed copy of petitioners’ Exhibit J, entitled “Restoring Integrity,” a statement by the Faculty of the
University of the Philippines College of Law for the en banc’s consideration in relation to the separate pending matter
concerning that supposed Faculty statement.
SO ORDERED.
Corona (C.J.), Velasco, Jr., Nachura, Leonardo-De Castro, Brion, Bersamin, Abad, Villarama, Jr., Perez and Mendoza,
JJ., concur.
Carpio, J., On Official Leave.
Carpio-Morales, J., I join the DISSENT of J. Sereno.
Peralta, J., On Leave.
Del Castillo, J., No Part.
Sereno, J., I dissent and reserve my right to issue a separate opinion.
Charges of plagiarism dismissed.
Note. — Under Section 1, Rule 36 of the Rules of Court, judges are mandated to directly prepare a judgment or final
order determining the merits of the case, stating clearly and distinctly the facts and law on which it is based; A judge
who holds a position of responsibility cannot hide behind the irresponsibility of the branch clerk of court because the
latter is not the guardian of his responsibilities. (Solid Homes, Inc. vs. Laserna, 550 SCRA 613 [2008])
——o0o——
REPUBLIC OF THE PHILIPPINES COURT OF APPEALS MANILA
NINTH DIVISION
FILIPINO SOCIETY OF COMPOSERS AUTHORS & PUBLISHERS, INC., Plaintiff-Appellee vs. PHILIPPINE
HOME CABLE HOLDINGS, INC., Defendant-Appellant.
FEB. 27, 2009
CA-G.R. CV NO. 81083
Before the Court is an appeal from the Decision, dated October 20, 2003, of Branch 90 of the Regional Trial
Court of Quezon City in Civil Case No. Q-98-33511.
The antecedent relevant facts, as culled from the records, are as follows:
Sometime from 1997-1998, defendant-appellant Philippine Home Cable Holdings, Inc. (Home Cable), a domestic
corporation engaged primarily in the business of installing, operating and maintaining a Community Antennae
Television System (CATV), or otherwise more commonly known as "Cable TV," was carrying a couple of karaoke
channels which played Filipino and English songs.
Noticing that the songs being played in the said karaoke channels were being used without prior authorization from
their copyright owners, the plaintiff-appellee Filipino Society of Composers Authors and Publishers (FILSCAP), a
non-stock and non-profit association of Filipino composers, authors and publishers, which includes amongst its
members several noted Filipino composers/authors such as Jim Paredes, Jose Mari Chan and George Canseco,
just to name a few, wrote a series of letters advising Home Cable to procure a music license, but this remained
unheeded.
As a result, on February 16, 1998, FILSCAP filed a Complaint against Home Cable for copyright infringement before
the Regional Trial Court of Quezon City. In the said complaint, FILSCAP essentially alleged that Home Cable
infringed the copyright of certain musical works that were in its repertoire when the latter used the same without
the former's authority or consent.
In its Answer with Compulsory Counterclaims Home Cable essentially argued that it has no copyright liability
since, by the very nature of its business of being a Cable TV provider, it merely re- transmits the broadcast content
of television stations and other program providers. In other words, Home Cable argued that it cannot be held liable
because it is not a broadcaster but merely an intermediary who receives the signals of broadcasters and distributes
the same to its subscribers.
During trial the plaintiff-appellee presented the following witnesses to support its claims: (1) Ms. Dorothy
LL. Tadeo, General Manager of FILSCAP, who essentially testified that FILSCAP represents practically all of the
Filipino composers as well as foreign composers, by virtue of various bilateral reciprocal agreements with
counterpart societies in other countries, for the enforcement of their copyright in the Philippines; (2) Ms. Marie
Jane Suarez, Licensing Manager of FILSCAP, who essentially testified that she personally monitored the karaoke
channels of Home Cable and listed down songs/music belonging to FILSCAP's repertoire which were played in
said channels; (3) Mr. Ang Kwee Tiang, Asia Pacific Regional Director of the International Confederation of
Societies and Composers (CISAC), who essentially testified that CISAC's present membership, totalling 189 member
organizations, includes FILSCAP, as well as other well-known music societies such as the American Society of
Composers and Publishers (ASCAP), Gesellschaft Für Musikalische Aufführungs-und Mechanische
Vervielfältigungsrechte (GEMA), Australasian Performing Right Association (APRA), Broadcast Music Inc. (BMI),
and The Performing Right Society Limited (PRS), to name a few, and that FILSCAP has entered into
reciprocal representation agreements for the public performance and communication to the public rights in
musical works with other society members of CISAC wherein their respective rights in musical works included in
their repertoires are mutually and appropriately enforced in their respective territories; and (4) Mr. George M.
Canseco, Composer and City Counselor of Quezon City, who essentially testified that he is a composer of numerous
Filipino hit songs such as "High School," "Dear Heart," "P.S. I Love You," " Ngayon at Kailanman," "Ikaw," etc., and
that, being a member of FILSCAP, he executed a Deed of Assignment in favor of FILSCAP, assigning,
transferring and setting over to the said society, the copyright over all his musical works.
For its part, the defendant-appellant presented the following witnesses: (1) Mr. Leo Guevarra San Miguel,
Executive Vice- President and Chief Operating Officer of Home Cable, who essentially explained the
nature of a Cable TV business - that it merely relays or re-transmits the broadcast signals of foreign, as well
as some domestic, channels, and that the originator of the programs are the broadcasters themselves who
guarantees that they have paid license fees for the materials that they broadcast to the public; (2) Mr. Michael
Nestor P. Martir, Vice-President for technical operations of Home Cable, who essentially explained, in technical
detail, the workings of Cable TV - that the operation of cable television system typically involves the reception of
broadcast signals by means of special television antenna and satellite dish owned and operated by Home Cable then
these electronic signals are transmitted by means of fiber and coaxial cable to homes of the subscribers and the
conversion of these signals into images and sounds by means of the subscriber's television sets; and (3) Atty.
Cypres Agbayani-Santiago, Legal Manager of Home Cable, who essentially explained the nature of the licensing
agreements which Home Cable enters with broadcasters or program originators - that these contracts usually refer
to the retransmission of programs or channels and that the licensor has the sole responsibility of determining the
content and sequence of the programs included in the channel to be re-transmitted.
After the submission of parties' respective Memoranda, the trial court rendered its appealed Decision in favor of
the plaintiff- appellee disposing as follows:
"WHEREFORE, judgment is rendered ordering the defendant to pay to the plaintiff the following sums of money,
to wit: a) Php1,000,000.00 in the concept of damages that appear to be just, in lieu of actual damages; b)
Php1,000,00.00 (sic) as exemplary damages; c) Php500,000.00 as reasonable attorney's fees and expenses of
litigation, plus costs of suit.
Moreover, the defendant, its agents, representatives, assignees and persons acting in its behalf and under its
authority, is or are ordered to cease and desist from using or causing to be used, any musical work included in the
repertoire of the plaintiff.
All other claims, including all counterclaims, are dismissed for lack of legal and/or factual basis.
SO ORDERED."
The trial court summed up its findings, to wit:
"To the mind of this Court, the main issue to be resolved is whether or not the plaintiff FILSCAP presented sufficient
evidence to justify its claim for infringement of copyright of the songs/musical works assigned
to/administered by it. This, in turn, will be determinative of the issue of whether or not it is entitled to the
award of damages as alleged in its complaint.
From the foregoing factual background, this Court finds that the preponderance of evidence on the main issue is in
favor of the plaintiff. For this Court finds and so holds that the evidence on record shows that the local composers
and the foreign composers, of songs/musical works played and continues to be played on television channels
carried by HOMECABLE through its cable service facilities through their foreign musical societies like ASCAP, BMI,
PRSL and the like, had authorized FILSCAP, as assignee of their songs/musical works, to file this case for
infringement of copyright and damages against HOMECABLE, which committed such act/s without the authority or
consent from FILSCAP and without the requisite performance license from FILSCAP or payment of the
license/royalties therefor despite demands from FILSCAP to such effect. As a result of the playing and the
continuous playing of these songs/musical works on the television channels carried by HOMECABLE through its cable
service facilities, HOMECABLE infringed the copyrights assigned to/administered by FILSCAP when the former
committed the afore-cited acts without authority or license from the latter. (see Sections 2, 5, 15, 19 and 32,
P.D. 49, as amended; see also Sections 72, 177, 180, 182 and 183, R.A. 8293)"
Hence, the present appeal.
The defendant-appellant imputes the following errors to the trial court:
I defendant-appellant cable TV company was liable for copyright infringement when certain music/songs belonging
AS CABLE OPERATOR, HOMECABLE RECEIVES, AMPLIFIES AND DISTRIBUTES PUBLICLY AVAILABLE SIGNALS OF
BROADCASTING ORGANIZATIONS. IT IS ERROR TO FIND THAT RELAYING OR DISTRIBUTING THESE SIGNALS BY
AUTHORITY OF THE SIGNAL OWNERS CONSTITUTES PERFORMANCE OR PUBLIC COMMUNICATION UNDER R.A.
8293.
II
HOMECABLE IS NOT A PERFORMER, BUT A VIEWER. CABLE OPERATORS DO NOT CREATE, ORIGINATE OR
CONTROL CONTENT. IT IS ERROR TO HOLD THAT HOMECABLE IS LIABLE FOR COPYRIGHT VIOLATION WHEN IT
HAS NO CONTROL OVER THE CONTENT OF BROADCAST PROGRAMS.
III
FILSCAP HAS COMPENSATED FOR THE USE OF ITS WORKS IN BROADCAST PROGRAMS. IT IS ERROR TO FIND
THAT FILSCAP IS ENTITLED AGAIN TO COMPENSATION WHEN THESE SAME PROGRAMS ARE SIMULTANEOUSLY
CARRIED BY CABLE OPERATORS IN THEIR NETWORKS.
IV
CABLE OPERATORS ARE NOT BROADCASTERS. THE BERNE CONVENTION APPLIES ONLY TO BROADCASTERS.
V
FILSCAP IS NOT AUTHORIZED BY ITS PRINCIPALS TO FILE THIS SUIT; AS ASSIGNEE WITH LIMITED
AUTHORITY, FILSCAP HAS NO LITIGABLE INTEREST.
VI
THE DISCRETIONARY AWARD OF JUST DAMAGES IN LIEU OF ACTUAL DAMAGES UNDER THE INTELLECTUAL
PROPERTY CODE REQUIRES MORE THAN JUST GUESSWORK OR PURE DISCRETION. IT IS ERROR TO AWARD
THE AMOUNT OF P1,000,000.00 AS JUST DAMAGES WITHOUT BASIS OR MEASURABLE STANDARD.
VII
THERE IS NO EVIDENCE OF BAD FAITH OR MALICE ON THE PART OF HOMECABLE WHICH HAS BEEN
AUTHORIZED BY THE BROADCASTING ORGANIZATIONS TO CARRY THEIR SIGNALS THROUGH HOMECABLE'S
NETWORK FOR A FEE. IT IS ERROR TO AWARD THE AMOUNT OF P1,000,000.00 BY WAY OF EXEMPLARY
DAMAGES.
VIII
ATTORNEY'S FEES AWARDED IN THE CONCEPT OF DAMAGES MUST BE PROVED, BOTH AS TO ITS AMOUNT AND
ITS BASIS UNDER ARTICLE 2208 OF THE CIVIL CODE. IT IS ERROR TO AWARD THE AMOUNT OF P500,000.00 BY
WAY OF ATTORNEY'S FEES WITHOUT SUCH PROOF.
All the issues brought in this appeal boil down to one (1) core issue: Did the trial court err in finding that the
to the plaintiff-appellee's repertoire were shown/played in the former's karaoke channels?
The Court finds partial merit in this appeal.
A copyright may be accurately defined as the right granted by a statute to the proprietor of an intellectual
production to its exclusive use and enjoyment to the extent specified in the statute (18 C.J.S. Copyright and Literary
Property § 1).
In the present case, these rights are granted by Republic Act No. 8293, specifically, Section 177 thereof
which provides the copy or economic rights (copyright and economic right are used interchangeably in
the statute) consisting of the exclusive right to carry out, authorize or prevent the following acts:
177.1 Reproduction of the work or substantial portion of the work;
 177.2 Dramatization, translation, adaptation, abridgment, arrangement or other transformation
of the work;
177.3 The first public distribution of the original and each copy of the work by sale or other
forms of transfer of ownership;
177.4 Rental of the original or a copy of an audiovisual or cinematographic work, a work
embodied in a sound recording, a computer program, a compilation of data and other materials
or a musical work in graphic form, irrespective of the ownership of the original or the copy
which is the subject of the rental;
177.5 Public display of the original or a copy of the work;
177.6 Public performance of the work; and
177.7 Other communication to the public of the work.
The execution, therefore, of any one or more of these exclusive rights conferred by RA 8293 on a copyright owner,
without his consent, constitutes copyright infringement. In essence, copyright infringement, is a trespass on a
private domain owned and occupied by the owner of the copyright, and, therefore, protected by law, consisting in
the doing by any person, without the consent of the owner of the copyright, of anything the sole right to do is
conferred by statute on the owner of the copyright (Columbia Pictures, Inc. vs. CA, 329 Phil. 875 [1996]).
With the invasion of his property rights, a copyright owner is naturally entitled to seek redress, enforce and
hold accountable the defrauder or usurper of said economic rights.
Coming now to the focal issue at hand, in light of RA 8293, did the defendant-appellant infringe the copyright of the
plaintiff- appellee in the present case when it played music/songs from the latter's repertoire in its karaoke
channels?
The Court answers in the affirmative.
While it is true that CATV operators, such as the defendant- appellant, generally merely receive programs and
retransmit them by private channels to additional viewers, the act of retransmitting or importing these programs to a
new and different market, to the mind of the Court, constitutes public performance of the copyrighted work by
other means of communication falling under Section 177.7 of RA 8293. This is because a CATV operator that
erects an antenna to pick up telecasts from Area A, B and C, then transmits them by cable to Area D for a fee is
essentially reproducing the copyrighted work and distributing the same to a wider audience. Thus, this
reproduction of copyrighted work without any authorization from the owner of the copyright constitutes
infringement.
The defendant-appellant's reliance in the US Supreme Court cases of Fortnightly Corp. vs. United Artists Television,
Inc., 392 U.S. 390 (1968); and Teleprompter Corp. vs. CBS, 415 U.S. 394 (1974), is misplaced because these
two cases did not categorically rule that CATV operators are not liable for copyright infringement.
True, the US Supreme Court, in the cases of Fortnightly and Teleprompter held CATV operators not liable for
copyright infringement. However, it must be stressed that said cases were decided by the US Supreme Court in
the light of its copyright law then existing at that time - Copyright Act of 1909, which as construed by the US
High Court then, did not contemplate, as of yet, the technological advancement of CATV. Thus, the US Supreme
Court held that CATV operators could not be held liable for copyright infringement simply because the Copyright Act
of 1909, as construed, contained no provision for cable operators' copyright liability for distant signal retransmission.
As held by the US Supreme Court in Fortnightly:
"The Copyright Act does not give a copyright holder control over all uses of his copyrighted work. Instead, §1 of the
Act enumerates several "rights" that are made "exclusive" to the holder of the copyright. If a person, without
authorization from the copyright holder, puts a copyrighted work to a use within the scope of one of these
"exclusive rights," he infringes the copyright. If he puts the work to a use not enumerated in §1, he does not
infringe. The respondent's contention is that the petitioner's CATV systems infringed the respondent's § 1(c)
exclusive right to (nondramatic literary works) and its § 1(d) exclusive right to "perform . . . publicly" (dramatic
works). The petitioner maintains that its CATV systems did not "perform" the copyrighted works at all.
At the outset, it is clear that the petitioner's systems did not "perform" the respondent's copyrighted works in any
conventional sense of that term, or in any manner envisaged by the Congress that enacted the law in 1909."
And later in the case of Teleprompter:
"These shifts in current business and commercial relationships, while of significance with respect to the organization
and growth of the communications industry, simply cannot be controlled by means of litigation based on copyright
legislation enacted more than half a century ago, when neither broadcast television nor CATV was yet conceived.
Detailed regulation of these relationships, and any ultimate resolution of the many sensitive and important problems
in this field, must be left to Congress."
In fact, in response to the two afore-stated US Supreme Court decisions that had held that cable retransmission of
broadcast signals did not constitute copyright infringement in accordance with the Copyright Act of 1909, the US
Congress subsequently amended the US Copyright Act in 1976 to specify that retransmissions of
broadcast signals - either local or distant, network or independent - are public performances and, therefore, fall
within the exclusive rights granted by copyright protection and created a form of copyright liability for cable
operators by establishing a cable compulsory license scheme in which cable operators would pay royalties for each
signal they carried to distant audiences (See Cox Cable Tucson, Inc. vs. David Ladd, 795 F.2d 1479 [US Court of
Appeals decision]; See also Chapter 9 of the General Guide to the Copyright Act of 1976; and Section 111 of 17
United States Code [17 U.S.C.])
Clearly, therefore, as the copyright law of the United States of America is written now, the CATV's act of
retransmitting broadcast signals to its subscribers is within the scope of copyright protection.
Similarly, in the considered view of the Court, our very own copyright law, RA 8293, specifically Sections 177.6 and
177.7 thereof, is broad enough to include the retransmission of copyrighted musical work via CATV system within its
scope of copyright protection. This is in line with Article 11 (1) of the Berne Convention for the Protection of
Literary and Artistic Works (commonly known as the Berne Convention), which was acceded to by the Philippines on
March 18, 1997, which provides as follows:
"(1) Authors of dramatic, dramatico-musical and musical works shall enjoy the exclusive right of
authorizing: the public performance of their works, including such public performance by any
means or process; any communication to the public of the performance of their works."
(emphasis supplied)
Besides, in the present case, a review of the records convinces this Court that the defendant-appellant was not
merely retransmitting or rebroadcasting the karaoke channel but was rather originally broadcasting the same
by engaging in program origination which is known in CATV industry parlance as "cablecasting." The evidence
on record reveals that the defendant- appellant merely bought videoke laser disc materials and "cablecasted" the
same in its karaoke channels which it operated and controlled. This is clear from the Memorandum of Agreement
between the defendant-appellant (as Second Party) and Precision Audio Video Service, Inc., (as First Party) which
states the following terms and conditions:
"1. The FIRST PARTY shall make available to the SECOND PARTY the videoke laser disc materials
for cablecast over Channel 38 (Music Mall) of the SECOND PARTY's cable system. The materials
shall consist initially of 24 volumes of videoke laser discs as itemized in Annex A of this
Memorandum of Agreement;
2. The SECOND PARTY shall be responsible for and in control of the operation of Channel 38. It
shall be responsible for providing the equipment (laser disc and VHS players) necessary for the
satisfactory operation of the Channel;
3. The FIRST PARTY agrees to sell, and the SECOND PARTY agrees to purchase the videoke laser
disc materials at 50% discount, or an amount equivalent to TWENTY THOUSAND PESOS
(P27,000.00) for the initial 24 volumes to be provided by the FIRST PARTY. Payment shall be in four
(4) equal monthly installments to begin the date of the signing of this Agreement;
4. Both Parties agree that new videoke laser disc releases of the FIRST PARTY shall
automatically form part of the SECOND PARTY's library of materials. The FIRST PARTY shall sell,
and the SECOND PARTY shall purchase these new releases at the discounted rate stipulated above;
5. The FIRST PARTY agrees to provide the SECOND PARTY, free of charge, with other videoke
materials on which the SECOND PARTY has distribution rights for promotional cablecast purposes
only. The SECOND PARTY guarantees to exert diligent care of these materials, and agrees to defray
the costs for damages incurred on these materials;
6. The SECOND PARTY shall give the FIRST PARTY videoke programming exclusivity in Channel 38.
Accordingly, the SECOND PARTY shall not allow any other person or entity, which is engaged in
the same programming concept as that engaged by the FIRST PARTY, the use of Channel 38
while this Agreement is in effect;
7. The SECOND PARTY shall provide the FIRST PARTY approximately 5 hours of cablecast
per day (sans advertisements). The SECOND PARTY shall also give the FIRST PARTY free airtime
equivalent to two (2)- 30 seconder per hour for the advertisement solely of the FIRST PARTY's
product and services. The production of the materials in VHS from and their delivery to the
SECOND PARTY shall be the responsibility and solely for the account of the FIRST PARTY;
8. The SECOND PARTY reserves the right to air paid advertisements in Channel 38 provided these
will not prejudice or directly compete with the products and services advertised by the FIRST
PARTY;" (emphasis and underscoring supplied)
Thus, unlike other channels which it merely retransmits to its subscribers such as CNN (Cable News
Network), BBC (British Broadcasting Corporation), HBO (Home Box Office), Cinemax, Discovery, and
National Geographic and the like, the defendant- appellant operated and controlled the karaoke
channels from which it played or "cablecasted" the videoke laser disc materials which it had
bought. In effect, the defendant-appellant was acting as a broadcaster in the case at bar. Hence,
its argument that it is merely retransmitting programs and is, thus, not liable for copyright
infringement does not apply to the particular circumstances of the case at bar.
True, the Memorandum of Agreement contains the following guarantee:
"9. The FIRST PARTY guarantees that it has full copyright on all Precision videoke laser
disc
materials to be cablecast by the SECOND PARTY. Corollarily, the FIRST PARTY guarantees that the
necessary permits/authorizations/stickers from concerned government agencies (i.e., VRB and
MTRCB) as required by law have already been obtained for these materials to be cablecast by the
SECOND PARTY."
However, in the considered view of the Court, this does not absolve the defendant-appellant from a charge of
copyright infringement since it was the entity that publicly communicated the copyrighted work without any
authority from the copyright owner. If any, the said guarantee merely gives the defendant-appellant the right to
go after Precision Audio Video Services, Inc., for possible reimbursement.
Moreover, defendant-appellant's contention that the plaintiff- appellee is not authorized to file this suit and has no
litigable interest is without merit. Section 183 of RA 8293 is unequivocal that a copyright owner may designate a
society of artists, writers and composers to enforce their economic and moral rights on their behalf and the
plaintiff-appellee's right to represent its members as well as other foreign societies in the Philippines has been
amply supported through testimony as well as evidenced by various deeds of assignment and several reciprocal
representation agreements.
Nonetheless, however, the Court deems it necessary to modify the lower court's award of damages in the instant
case.
As to actual damages, actual damages to be awarded in cases of copyright infringement must be proven under
Section 216.1 (b) of RA 8293 and the plaintiff-appellee merely estimated its claim of actual damages
corresponding to license fees since August 17, 1997 up to the filing of the complaint. Thus, the lower court's
award of P1,000,000.00 as actual damages is without basis. To the mind of the Court, what the plaintiff-appellee is
entitled to is an award of temperate/moderate damages, not actual damages. For although the exact amount of
damage or loss cannot be determined with reasonable certainty, the fact that there was infringement means
they suffered losses for which they are entitled to moderate damages (Sambar vs. Levi Strauss, G.R. No.
132604, March 6, 2002, citing Art. 2224, Civil Code). Considering the circumstances, the Court finds an award
of Five Hundred Thousand Pesos (Php500,000.00) as moderate damages to be fair and reasonable.
Anent the exemplary damages, the lower court did not err in awarding exemplary damages by way of correction for
the public good (Article 2229 Civil Code; see also Section 216.1 (e) of RA 8293). However, considering the
circumstances, this Court deems it necessary to reduce the same to Five Hundred Thousand Pesos (Php500,000.00).
Anent the award of attorney's fees, the Court finds the same to be justified considering that the plaintiff-appellee
was constrained to file suit in order to protect its copyright over its musical works as a direct result of the
defendant-appellant's infringement of the same "(e) Such other terms and conditions, including the payment of
moral and exemplary damages, which the court may deem proper, wise and equitable and the destruction of
infringing copies of the work even in the event of acquittal in a criminal case." (see Section 216.1 (b) of RA 8293).
Be that as it may, the Court deems it necessary to reduce the same to a much more reasonable amount of One
Hundred Thousand Pesos (Php100,000.00).
WHEREFORE, in view of the foregoing, the Decision, dated October 20, 2003, of Branch 90 of the Regional Trial
Court of Quezon City in Civil Case No. Q-98-33511 is hereby MODIFIED so that the amount of Php1,000,000.00 as
actual damages is DELETED and in lieu thereof, temperate damages in the amount of Php500,000.00 is
awarded. Further, the amount of Php1,000,000.00 as exemplary damages is also REDUCED to Php500,000.00 and
the award of attorney's fees is likewise REDUCED to Php100,000.00. In all other respects, said judgment is hereby
AFFIRMED.
SO ORDERED.
——o0o——
ABS-CBN BROADCASTING CORPORATION, petitioner, vs. PHILIPPINE MULTI-MEDIA SYSTEM, INC.,
CESAR G. REYES, FRANCIS CHUA (ANG BIAO), MANUEL F. ABELLADA, RAUL B. DE MESA, AND
ALOYSIUS M. COLAYCO, respondents
G.R. Nos. 175769-70. January 19, 2009
Copyrights; Broadcasting; Rebroadcasting is “the simultaneous broadcasting by one broadcasting organization of the
broadcast of another broadcasting organization.”—Under the Rome Convention, rebroadcasting is “the simultaneous
broadcasting by one broadcasting organization of the broadcast of another broadcasting organization.” The Working
Paper prepared by the Secretariat of the Standing Committee on Copyright and Related Rights defines broadcasting
organizations as “entities that take the financial and editorial responsibility for the selection and arrangement of, and
investment in, the transmitted content.” Evidently, PMSI would not qualify as a broadcasting organization because it
does not have the aforementioned responsibilities imposed upon broadcasting organizations, such as ABS-CBN.
Same; Same; While the Rome Convention gives broadcasting organizations the right to authorize or prohibit the
rebroadcasting of its broadcast, however, this protection does not extend to cable retransmission. — While the Rome
Convention gives broadcasting organizations the right to authorize or prohibit the rebroadcasting of its broadcast,
however, this protection does not extend to cable retransmission. The retransmission of ABS-CBN’s signals by PMSI
—which functions essentially as a cable television—does not therefore constitute rebroadcasting in violation of the
former’s intellectual property rights under the IP Code. It must be emphasized that the law on copyright is not
absolute. The IP Code provides that: Sec. 184. Limitations on Copyright. — 184.1. Notwithstanding the provisions of
Chapter V, the following acts shall not constitute infringement of copyright: x x x x (h) The use made of a work by or
under the direction or control of the Government, by the National Library or by educational, scientific or professional
institutions where such use is in the public interest and is compatible with fair use.
Same; Same; Must-Carry Rule; The imposition of the must-carry rule is within the National Telecommunications’
(NTC’s) power to promulgate rules and regulations, as public safety and interest may require, to encourage a larger
and more effective use of communications, radio and television broadcasting facilities, and to maintain effective
competition among private entities in these activities whenever the commission finds it reasonably feasible.—The
carriage of ABS-CBN’s signals by virtue of the must-carry rule in Memorandum Circular No. 04-08-88 is under the
direction and control of the government though the NTC which is vested with exclusive jurisdiction to supervise,
regulate and control telecommunications and broadcast services/facilities in the Philippines. The imposition of the
must-carry rule is within the NTC’s power to promulgate rules and regulations, as public safety and interest may
require, to encourage a larger and more effective use of communications, radio and television broadcasting facilities,
and to maintain effective competition among private entities in these activities whenever the Commission finds it
reasonably feasible. As correctly observed by the Director-General of the IPO: Accordingly, the “Must-Carry Rule”
under NTC Circular No. 4-08-88 falls under the foregoing category of limitations on copyright. This Office agrees with
the Appellant [herein respondent PMSI] that the “Must-Carry Rule” is in consonance with the principles and
objectives underlying Executive Order No. 436, to wit: The Filipino people must be given wider access to more
sources of news, information, education, sports event and entertainment programs other than those provided for by
mass media and afforded television programs to attain a well-informed, well-versed and culturally refined citizenry
and enhance their socio-economic growth: WHEREAS, cable television (CATV) systems could support or supplement
the services provided by television broadcast facilities, local and overseas, as the national information highway to the
countryside.
Intellectual Property Code of the Philippines (R.A. No. 8293); Intellectual property protection is merely a means
towards the end of making society benefit from the creation of its men and women of talent and genius. —
Intellectual property protection is merely a means towards the end of making society benefit from the creation of its
men and women of talent and genius. This is the essence of intellectual property laws, and it explains why certain
products of ingenuity that are concealed from the public are outside the pale of protection afforded by the law. It
also explains why the author or the creator enjoys no more rights than are consistent with public welfare.
Same; Broadcasting; The radio spectrum is a finite resource that is a part of the national patrimony and the use
thereof is a privilege conferred upon the grantee by the State and may be withdrawn anytime, after due process.—
PMSI was likewise granted a legislative franchise under Republic Act No. 8630, Section 4 of which similarly states
that it “shall provide adequate public service time to enable the government, through the said broadcasting stations,
to reach the population on important public issues; provide at all times sound and balanced programming; promote
public participation such as in community programming; assist in the functions of public information and education
x x x.” Section 5, paragraph 2 of the same law provides that “the radio spectrum is a finite resource that is a part of
the national patrimony and the use thereof is a privilege conferred upon the grantee by the State and may be
withdrawn anytime, after due process.”
Same; Telecommunication Franchise; In Telecom & Broadcast Attys. of the Phils., Inc. v. COMELEC, 289 SCRA 337
(1998), the Court held that a franchise is a mere privilege which may be reasonably burdened with some form of
public service. — In Telecom. & Broadcast Attys. of the Phils., Inc. v. COMELEC, 289 SCRA 337 (1998), the Court
held that a franchise is a mere privilege which may be reasonably burdened with some form of public service. Thus:
All broadcasting, whether by radio or by television stations, is licensed by the government. Airwave frequencies have
to be allocated as there are more individuals who want to broadcast than there are frequencies to assign. A
franchise is thus a privilege subject, among other things, to amendment by Congress in accordance with the
constitutional provision that “any such franchise or right granted . . . shall be subject to amendment, alteration or
repeal by the Congress when the common good so requires.”
Same; Same; In truth, radio and television broadcasting companies, which are given franchises, do not own the
airwaves and frequencies through which they transmit broadcast signals and images. — In truth, radio and television
broadcasting companies, which are given franchises, do not own the airwaves and frequencies through which they
transmit broadcast signals and images. They are merely given the temporary privilege of using them. Since a
franchise is a mere privilege, the exercise of the privilege may reasonably be burdened with the performance by the
grantee of some form of public service. x x x There is likewise no merit to ABS-CBN’s claim that PMSI’s carriage of its
signals is for a commercial purpose; that its being the country’s top broadcasting company, the availability of its
signals allegedly enhances PMSI’s attractiveness to potential customers; or that the unauthorized carriage of its
signals by PMSI has created competition between its Metro Manila and regional stations.
Same; Same; Anyone in the country who owns a television set and antenna can receive ABS-CBN’s signals for free.
— Administrative charges cannot be based on mere speculation or conjecture. The complainant has the burden of
proving by substantial evidence the allegations in the complaint. Mere allegation is not evidence, and is not
equivalent to proof. Anyone in the country who owns a television set and antenna can receive ABS-CBN’s signals for
free. Other broadcasting organizations with free-to-air signals such as GMA-7, RPN-9, ABC-5, and IBC-13 can
likewise be accessed for free. No payment is required to view the said channels because these broadcasting
networks do not generate revenue from subscription from their viewers but from airtime revenue from contracts
with commercial advertisers and producers, as well as from direct sales.
Same; Same; It must be emphasized that, as a national broadcasting organization, one of ABS-CBN’s responsibilities
is to scatter its signal to the widest area of coverage as possible. — There is no merit to ABS-CBN’s argument that
PMSI’s carriage of Channels 2 and 23 resulted in competition between its Metro Manila and regional stations. ABS-
CBN is free to decide to pattern its regional programming in accordance with perceived demands of the region;
however, it cannot impose this kind of programming on the regional viewers who are also entitled to the free-to-air
channels. It must be emphasized that, as a national broadcasting organization, one of ABS-CBN’s responsibilities is
to scatter its signals to the widest area of coverage as possible. That it should limit its signal reach for the sole
purpose of gaining profit for its regional stations undermines public interest and deprives the viewers of their right to
access to information.
Broadcasting; Must-Carry Rule; The “Must-Carry Rule” favors both broadcasting organizations and the public. — The
“Must-Carry Rule” favors both broadcasting organizations and the public. It prevents cable television companies from
excluding broadcasting organization especially in those places not reached by signal. Also, the rule prevents cable
television companies from depriving viewers in far-flung areas the enjoyment of programs available to city viewers.
In fact, this Office finds the rule more burdensome on the part of the cable television companies. The latter carries
the television signals and shoulders the costs without any recourse of charging. On the other hand, the signals that
are carried by cable television companies are dispersed and scattered by the television stations and anybody with a
television set is free to pick them up.
Constitutional Law; One of the essential requisites for a successful judicial inquiry into constitutional questions is that
the resolution of the constitutional question must be necessary in deciding the case. — With regard to the issue of
the constitutionality of the must-carry rule, the Court finds that its resolution is not necessary in the disposition of
the instant case. One of the essential requisites for a successful judicial inquiry into constitutional questions is that
the resolution of the constitutional question must be necessary in deciding the case. In Spouses Mirasol v. Court of
Appeals, 351 SCRA 44 (2001), we held: As a rule, the courts will not resolve the constitutionality of a law, if the
controversy can be settled on other grounds. The policy of the courts is to avoid ruling on constitutional questions
and to presume that the acts of the political departments are valid, absent a clear and unmistakable showing to the
contrary. To doubt is to sustain. This presumption is based on the doctrine of separation of powers. This means that
the measure had first been carefully studied by the legislative and executive departments and found to be in accord
with the Constitution before it was finally enacted and approved.
Same; As a general rule, the question of constitutionality must be raised at the earliest opportunity so that if not
raised in the pleadings, ordinarily it may not be raised in the trial, and if not raised in the trial court, it will not be
considered on appeal. — The records show that petitioner assailed the constitutionality of Memorandum Circular No.
04-08-88 by way of a collateral attack before the Court of Appeals. In Philippine National Bank v. Palma, 466 SCRA
307 (2005), we ruled that for reasons of public policy, the constitutionality of a law cannot be collaterally attacked. A
law is deemed valid unless declared null and void by a competent court; more so when the issue has not been duly
pleaded in the trial court. As a general rule, the question of constitutionality must be raised at the earliest
opportunity so that if not raised in the pleadings, ordinarily it may not be raised in the trial, and if not raised in the
trial court, it will not be considered on appeal. In Philippine Veterans Bank v. Court of Appeals, 462 SCRA 336
(2005), we held: We decline to rule on the issue of constitutionality as all the requisites for the exercise of judicial
review are not present herein. Specifically, the question of constitutionality will not be passed upon by the Court
unless, at the first opportunity, it is properly raised and presented in an appropriate case, adequately argued, and is
necessary to a determination of the case, particularly where the issue of constitutionality is the very lis mota
presented. x x x
Judgments; Where the issues have become moot, there is no justiciable controversy, thereby rendering the
resolution of the same of no practical use or value. — It bears stressing that the proceedings for punishment of
indirect contempt are criminal in nature. The modes of procedure and rules of evidence adopted in contempt
proceedings are similar in nature to those used in criminal prosecutions. While it may be argued that the Court of
Appeals should have ordered respondents to comment, the issue has been rendered moot in light of our ruling on
the merits. To order respondents to comment and have the Court of Appeals conduct a hearing on the contempt
charge when the main case has already been disposed of in favor of PMSI would be circuitous. Where the issues
have become moot, there is no justiciable controversy, thereby rendering the resolution of the same of no practical
use or value.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Poblador, Bautista & Reyes for petitioner.
Rodrigo, Berenguer & Guno for respondents.
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the July 12, 2006 Decision of the Court of Appeals in CA-G.R. SP Nos.
88092 and 90762, which affirmed the December 20, 2004 Decision of the Director-General of the Intellectual
Property Office (IPO) in Appeal No. 10-2004-0002. Also assailed is the December 11, 2006 Resolution denying the
motion for reconsideration.
Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is licensed under the laws of the Republic of the Philippines
to engage in television and radio broadcasting. It broadcasts television programs by wireless means to Metro Manila
and nearby provinces, and by satellite to provincial stations through Channel 2 on Very High Frequency (VHF) and
Channel 23 on Ultra High Frequency (UHF). The programs aired over Channels 2 and 23 are either produced by ABS-
CBN or purchased from or licensed by other producers.
ABS-CBN also owns regional television stations which pattern their programming in accordance with perceived
demands of the region. Thus, television programs shown in Metro Manila and nearby provinces are not necessarily
shown in other provinces.
Respondent Philippine Multi-Media System, Inc. (PMSI) is the operator of Dream Broadcasting System. It delivers
digital direct-to-home (DTH) television via satellite to its subscribers all over the Philippines. Herein individual
respondents, Cesar G. Reyes, Francis Chua, Manuel F. Abellada, Raul B. De Mesa, and Aloysius M. Colayco, are
members of PMSI’s Board of Directors.
PMSI was granted a legislative franchise under Republic Act No. 86305 on May 7, 1998 and was given a Provisional
Authority by the National Telecommunications Commission (NTC) on February 1, 2000 to install, operate and
maintain a nationwide DTH satellite service. When it commenced operations, it offered as part of its program line-up
ABS-CBN Channels 2 and 23, NBN, Channel 4, ABC Channel 5, GMA Channel 7, RPN Channel 9, and IBC Channel 13,
together with other paid premium program channels.
However, on April 25, 2001, ABS-CBN demanded for PMSI to cease and desist from rebroadcasting Channels 2 and
23. On April 27, 2001, PMSI replied that the rebroadcasting was in accordance with the authority granted it by NTC
and its obligation under NTC Memorandum Circular No. 4-08-88, Section 6.2 of which requires all cable television
system operators operating in a community within Grade “A” or “B” contours to carry the television signals of the
authorized television broadcast stations.
Thereafter, negotiations ensued between the parties in an effort to reach a settlement; however, the negotiations
were terminated on April 4, 2002 by ABS-CBN allegedly due to PMSI’s inability to ensure the prevention of illegal
retransmission and further rebroadcast of its signals, as well as the adverse effect of the rebroadcasts on the
business operations of its regional television stations.
On May 13, 2002, ABS-CBN filed with the IPO a complaint for “Violation of Laws Involving Property Rights, with
Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction,” which was
docketed as IPV No. 10-2002-0004. It alleged that PMSI’s unauthorized rebroadcasting of Channels 2 and 23
infringed on its broadcasting rights and copyright.
On July 2, 2002, the Bureau of Legal Affairs (BLA) of the IPO granted ABS-CBN’s application for a temporary
restraining order. On July 12, 2002, PMSI suspended its retransmission of Channels 2 and 23 and likewise filed a
petition for certiorari with the Court of Appeals, which was docketed as CA-G.R. SP No. 71597.
Subsequently, PMSI filed with the BLA a Manifestation reiterating that it is subject to the must-carry rule under
Memorandum Circular No. 04-08-88. It also submitted a letter dated December 20, 2002 of then NTC Commissioner
Armi Jane R. Borje to PMSI stating as follows:
“This refers to your letter dated December 16, 2002 requesting for regulatory guidance from this Commission in
connection with the application and coverage of NTC Memorandum Circular No. 4-08-88, particularly Section 6
thereof, on mandatory carriage of television broadcast signals, to the direct-to-home (DTH) pay television services of
Philippine Multi-Media System, Inc. (PMSI).
Preliminarily, both DTH pay television and cable television services are broadcast services, the only difference being
the medium of delivering such services (i.e. the former by satellite and the latter by cable). Both can carry broadcast
signals to the remote areas, thus enriching the lives of the residents thereof through the dissemination of social,
economic, educational information and cultural programs.
The DTH pay television services of PMSI is equipped to provide nationwide DTH satellite services. Concededly,
PMSI’s DTH pay television services covers very much wider areas in terms of carriage of broadcast signals, including
areas not reachable by cable television services thereby providing a better medium of dissemination of information
to the public.
In view of the foregoing and the spirit and intent of NTC memorandum Circular No. 4-08-88, particularly Section 6
thereof, on mandatory carriage of television broadcast signals, DTH pay television services should be deemed
covered by such NTC Memorandum Circular.
For your guidance.” (Emphasis added)
On August 26, 2003, PMSI filed another Manifestation with the BLA that it received a letter dated July 24, 2003 from
the NTC enjoining strict and immediate compliance with the must-carry rule under Memorandum Circular No. 04-08-
88, to wit:
Dear Mr. Abellada:
Last July 22, 2003, the National Telecommunications Commission (NTC) received a letter dated July 17, 2003 from
President/COO Rene Q. Bello of the International Broadcasting Corporation (IBC-Channel 13) complaining that your
company, Dream Broadcasting System, Inc., has cut-off, without any notice or explanation whatsoever, to air the
programs of IBC-13, a free-to-air television, to the detriment of the public.
We were told that, until now, this has been going on.
Please be advised that as a direct broadcast satellite operator, operating a direct-to-home (DTH) broadcasting
system, with a provisional authority (PA) from the NTC, your company, along with cable television operators, are
mandated to strictly comply with the existing policy of NTC on mandatory carriage of television broadcast signals as
provided under Memorandum Circular No. 04-08-88, also known as the Revised Rules and Regulations Governing
Cable Television System in the Philippines.
This mandatory coverage provision under Section 6.2 of said Memorandum Circular, requires all cable television
system operators, operating in a community within the Grade “A” or “B” contours to “must-carry” the television
signals of the authorized television broadcast stations, one of which is IBC-13. Said directive equally applies to your
company as the circular was issued to give consumers and the public a wider access to more sources of news,
information, entertainment and other programs/contents.
This Commission, as the governing agency vested by laws with the jurisdiction, supervision and control over all
public services, which includes direct broadcast satellite operators, and taking into consideration the paramount
interest of the public in general, hereby directs you to immediately restore the signal of IBC-13 in your network
programs, pursuant to existing circulars and regulations of the Commission.
For strict compliance.” (Emphasis added)
Meanwhile, on October 10, 2003, the NTC issued Memorandum Circular No. 10-10-2003, entitled “Implementing
Rules and Regulations Governing Community Antenna/Cable Television (CATV) and Direct Broadcast Satellite (DBS)
Services to Promote Competition in the Sector.” Article 6, Section 8 thereof states:
“As a general rule, the reception, distribution and/or transmission by any CATV/DBS operator of any television
signals without any agreement with or authorization from program/content providers are prohibited.”
On whether Memorandum Circular No. 10-10-2003 amended Memorandum Circular No. 04-08-88, the NTC explained
to PMSI in a letter dated November 3, 2003 that:
To address your query on whether or not the provisions of MC 10-10-2003 would have the effect of amending the
provisions of MC 4-08-88 on mandatory carriage of television signals, the answer is in the negative.
xxxx
The Commission maintains that, MC 4-08-88 remains valid, subsisting and enforceable.
Please be advised, therefore, that as duly licensed direct-to-home satellite television service provider authorized by
this Commission, your company continues to be bound by the guidelines provided for under MC 04-08-88,
specifically your obligation under its mandatory carriage provisions, in addition to your obligations under MC 10-10-
2003. (Emphasis added)
Please be guided accordingly.”
On December 22, 2003, the BLA rendered a decision finding that PMSI infringed the broadcasting rights and
copyright of ABS-CBN and ordering it to permanently cease and desist from rebroadcasting Channels 2 and 23.
On February 6, 2004, PMSI filed an appeal with the Office of the Director-General of the IPO which was docketed as
Appeal No. 10-2004-0002. On December 23, 2004, it also filed with the Court of Appeals a “Motion to Withdraw
Petition; Alternatively, Memorandum of the Petition for Certiorari” in CA-G.R. SP No. 71597, which was granted in a
resolution dated February 17, 2005.
On December 20, 2004, the Director-General of the IPO rendered a decision in favor of PMSI, the dispositive portion
of which states:
“WHEREFORE, premises considered, the instant appeal is hereby GRANTED. Accordingly, Decision No. 2003-01
dated 22 December 2003 of the Director of Bureau of Legal Affairs is hereby REVERSED and SET ASIDE.
Let a copy of this Decision be furnished the Director of the Bureau of Legal Affairs for appropriate action, and the
records be returned to her for proper disposition. The Documentation, Information and Technology Transfer Bureau
is also given a copy for library and reference purposes.
SO ORDERED.”
Thus, ABS-CBN filed a petition for review with prayer for issuance of a temporary restraining order and writ of
preliminary injunction with the Court of Appeals, which was docketed as CA-G.R. SP No. 88092.
On July 18, 2005, the Court of Appeals issued a temporary restraining order. Thereafter, ABS-CBN filed a petition for
contempt against PMSI for continuing to rebroadcast Channels 2 and 23 despite the restraining order. The case was
docketed as CA- G.R. SP No. 90762.
On November 14, 2005, the Court of Appeals ordered the consolidation of CA-G.R. SP Nos. 88092 and 90762.
In the assailed Decision dated July 12, 2006, the Court of Appeals sustained the findings of the Director-General of
the IPO and dismissed both petitions filed by ABS-CBN.
ABS-CBN’s motion for reconsideration was denied, hence, this petition.
ABS-CBN contends that PMSI’s unauthorized rebroadcasting of Channels 2 and 23 is an infringement of its
broadcasting rights and copyright under the Intellectual Property Code (IP Code); that Memorandum Circular No. 04-
08-88 excludes DTH satellite television operators; that the Court of Appeals’ interpretation of the must-carry rule
violates Section 9 of Article III of the Constitution because it allows the taking of property for public use without
payment of just compensation; that the Court of Appeals erred in dismissing the petition for contempt docketed as
CA-G.R. SP No. 90762 without requiring respondents to file comment.
Respondents, on the other hand, argue that PMSI’s rebroadcasting of Channels 2 and 23 is sanctioned by
Memorandum Circular No. 04-08-88; that the must-carry rule under the Memorandum Circular is a valid exercise of
police power; and that the Court of Appeals correctly dismissed CA-G.R. SP No. 90762 since it found no need to
exercise its power of contempt.
After a careful review of the facts and records of this case, we affirm the findings of the Director-General of the IPO
and the Court of Appeals.
There is no merit in ABS-CBN’s contention that PMSI violated its broadcaster’s rights under Section 211 of the IP
Code which provides in part:
Chapter XIV
BROADCASTING ORGANIZATIONS
Sec. 211. Scope of Right.—Subject to the provisions of Section 212, broadcasting organizations shall enjoy the
exclusive right to carry out, authorize or prevent any of the following acts:
211.1. The rebroadcasting of their broadcasts;
xxxx
Neither is PMSI guilty of infringement of ABS-CBN’s copyright under Section 177 of the IP Code which states that
copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the public
performance of the work (Section 177.6), and other communication to the public of the work (Section 177.7).
Section 202.7 of the IP Code defines broadcasting as “the transmission by wireless means for the public reception of
sounds or of images or of representations thereof; such transmission by satellite is also ‘broadcasting’ where the
means for decrypting are provided to the public by the broadcasting organization or with its consent.”
On the other hand, rebroadcasting as defined in Article 3(g) of the International Convention for the Protection of
Performers, Producers of Phonograms and Broadcasting Organizations, otherwise known as the 1961 Rome
Convention, of which the Republic of the Philippines is a signatory, is “the simultaneous broadcasting by one
broadcasting organization of the broadcast of another broadcasting organization.”
The Director-General of the IPO correctly found that PMSI is not engaged in rebroadcasting and thus cannot be
considered to have infringed ABS-CBN’s broadcasting rights and copyright, thus:
“That the Appellant’s [herein respondent PMSI] subscribers are able to view Appellee’s [herein petitioner ABS-CBN]
programs (Channels 2 and 23) at the same time that the latter is broadcasting the same is undisputed. The question
however is, would the Appellant in doing so be considered engaged in broadcasting. Section 202.7 of the IP Code
states that broadcasting means
“the transmission by wireless means for the public reception of sounds or of images or of representations thereof;
such transmission by satellite is also ‘broadcasting’ where the means for decrypting are provided to the public by the
broadcasting organization or with its consent.”
Section 202.7 of the IP Code, thus, provides two instances wherein there is broadcasting, to wit:
1. The transmission by wireless means for the public reception of sounds or of images or of representations
thereof; and
2. The transmission by satellite for the public reception of sounds or of images or of representations thereof where
the means for decrypting are provided to the public by the broadcasting organization or with its consent.
It is under the second category that Appellant’s DTH satellite television service must be examined since it is satellite-
based. The elements of such category are as follows:
1. There is transmission of sounds or images or of representations thereof;
2. The transmission is through satellite;
3. The transmission is for public reception; and
4. The means for decrypting are provided to the public by the broadcasting organization or with its
consent.
It is only the presence of all the above elements can a determination that the DTH is broadcasting and consequently,
rebroadcasting Appellee’s signals in violation of Sections 211 and 177 of the IP Code, may be arrived at.
Accordingly, this Office is of the view that the transmission contemplated under Section 202.7 of the IP Code
presupposes that the origin of the signals is the broadcaster. Hence, a program that is broadcasted is attributed to
the broadcaster. In the same manner, the rebroadcasted program is attributed to the rebroadcaster.
In the case at hand, Appellant is not the origin nor does it claim to be the origin of the programs broadcasted by the
Appellee. Appellant did not make and transmit on its own but merely carried the existing signals of the Appellee.
When Appellant’s subscribers view Appellee’s programs in Channels 2 and 23, they know that the origin thereof was
the Appellee.
Aptly, it is imperative to discern the nature of broadcasting. When a broadcaster transmits, the signals are scattered
or dispersed in the air. Anybody may pick-up these signals. There is no restriction as to its number, type or class of
recipients. To receive the signals, one is not required to subscribe or to pay any fee. One only has to have a
receiver, and in case of television signals, a television set, and to tune-in to the right channel/frequency. The
definition of broadcasting, wherein it is required that the transmission is wireless, all the more supports this
discussion. Apparently, the undiscriminating dispersal of signals in the air is possible only through wireless means.
The use of wire in transmitting signals, such as cable television, limits the recipients to those who are connected.
Unlike wireless transmissions, in wire-based transmissions, it is not enough that one wants to be connected and
possesses the equipment. The service provider, such as cable television companies may choose its subscribers.
The only limitation to such dispersal of signals in the air is the technical capacity of the transmitters and other
equipment employed by the broadcaster. While the broadcaster may use a less powerful transmitter to limit its
coverage, this is merely a business strategy or decision and not an inherent limitation when transmission is through
cable.
Accordingly, the nature of broadcasting is to scatter the signals in its widest area of coverage as possible. On this
score, it may be said that making public means that accessibility is undiscriminating as long as it [is] within the
range of the transmitter and equipment of the broadcaster. That the medium through which the Appellant carries
the Appellee’s signal, that is via satellite, does not diminish the fact that it operates and functions as a cable
television. It remains that the Appellant’s transmission of signals via its DTH satellite television service cannot be
considered within the purview of broadcasting. x x x
xxxx
This Office also finds no evidence on record showing that the Appellant has provided decrypting means to the public
indiscriminately. Considering the nature of this case, which is punitive in fact, the burden of proving the existence of
the elements constituting the acts punishable rests on the shoulder of the complainant.
Accordingly, this Office finds that there is no rebroadcasting on the part of the Appellant of the Appellee’s programs
on Channels 2 and 23, as defined under the Rome Convention.”
Under the Rome Convention, rebroadcasting is “the simultaneous broadcasting by one broadcasting organization of
the broadcast of another broadcasting organization.” The Working Paper prepared by the Secretariat of the Standing
Committee on Copyright and Related Rights defines broadcasting organizations as “entities that take the financial
and editorial responsibility for the selection and arrangement of, and investment in, the transmitted content.”
Evidently, PMSI would not qualify as a broadcasting organization because it does not have the aforementioned
responsibilities imposed upon broadcasting organizations, such as ABS-CBN.
ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which the viewers receive in its
unaltered form. PMSI does not produce, select, or determine the programs to be shown in Channels 2 and 23.
Likewise, it does not pass itself off as the origin or author of such programs. Insofar as Channels 2 and 23 are
concerned, PMSI merely retransmits the same in accordance with Memorandum Circular 04-08-88. With regard to its
premium channels, it buys the channels from content providers and transmits on an as-is basis to its viewers.
Clearly, PMSI does not perform the functions of a broadcasting organization; thus, it cannot be said that it is
engaged in rebroadcasting Channels 2 and 23.
The Director-General of the IPO and the Court of Appeals also correctly found that PMSI’s services are similar to a
cable television system because the services it renders fall under cable “retransmission,” as described in the Working
Paper, to wit:
“(G) Cable Retransmission
47. When a radio or television program is being broadcast, it can be retransmitted to new audiences by means of
cable or wire. In the early days of cable television, it was mainly used to improve signal reception, particularly in so-
called “shadow zones,” or to distribute the signals in large buildings or building complexes. With improvements in
technology, cable operators now often receive signals from satellites before retransmitting them in an unaltered
form to their subscribers through cable.
48. In principle, cable retransmission can be either simultaneous with the broadcast over-the-air or delayed
(deferred transmission) on the basis of a fixation or a reproduction of a fixation. Furthermore, they might be
unaltered or altered, for example through replacement of commercials, etc. In general, however, the term
“retransmission” seems to be reserved for such transmissions which are both simultaneous and unaltered.
49. The Rome Convention does not grant rights against unauthorized cable retransmission. Without such a right,
cable operators can retransmit both domestic and foreign over the air broadcasts simultaneously to their subscribers
without permission from the broadcasting organizations or other rightholders and without obligation to pay
remuneration.” (Emphasis added)
Thus, while the Rome Convention gives broadcasting organizations the right to authorize or prohibit the
rebroadcasting of its broadcast, however, this protection does not extend to cable retransmission. The
retransmission of ABS-CBN’s signals by PMSI — which functions essentially as a cable television — does not
therefore constitute rebroadcasting in violation of the former’s intellectual property rights under the IP Code.
It must be emphasized that the law on copyright is not absolute. The IP Code provides that:
“Sec. 184. Limitations on Copyright.—
184.1. Notwithstanding the provisions of Chapter V, the following acts shall not constitute infringement of
copyright:
xxxx
(h) The use made of a work by or under the direction or control of the Government, by the National Library or by
educational, scientific or professional institutions where such use is in the public interest and is compatible with fair
use;”
The carriage of ABS-CBN’s signals by virtue of the must-carry rule in Memorandum Circular No. 04-08-88 is under
the direction and control of the government though the NTC which is vested with exclusive jurisdiction to supervise,
regulate and control telecommunications and broadcast services/facilities in the Philippines. The imposi4tion of the
must-carry rule is within the NTC’s power to promulgate rules and regulations, as public safety and interest may
require, to encourage a larger and more effective use of communications, radio and television broadcasting facilities,
and to maintain effective competition among private entities in these activities whenever the Commission finds it
reasonably feasible. As correctly observed by the Director-General of the IPO:
“Accordingly, the “Must-Carry Rule” under NTC Circular No. 4-08-88 falls under the foregoing category of limitations
on copyright. This Office agrees with the Appellant [herein respondent PMSI] that the “Must-Carry Rule” is in
consonance with the principles and objectives underlying Executive Order No. 436, to wit:
The Filipino people must be given wider access to more sources of news, information, education, sports event and
entertainment programs other than those provided for by mass media and afforded television programs to attain a
well informed, well-versed and culturally refined citizenry and enhance their socio-economic growth:
WHEREAS, cable television (CATV) systems could support or supplement the services provided by television
broadcast facilities, local and overseas, as the national information highway to the countryside.”
The Court of Appeals likewise correctly observed that:
“[T]he very intent and spirit of the NTC Circular will prevent a situation whereby station owners and a few networks
would have unfettered power to make time available only to the highest bidders, to communicate only their own
views on public issues, people, and to permit on the air only those with whom they agreed — contrary to the state
policy that the (franchise) grantee like the petitioner, private respondent and other TV station owners, shall
programming and assist in the functions of public information and education.
This is for the first time that we have a structure that works to accomplish explicit state policy goals.”
Indeed, intellectual property protection is merely a means towards the end of making society benefit from the
creation of its men and women of talent and genius. This is the essence of intellectual property laws, and it explains
why certain products of ingenuity that are concealed from the public are outside the pale of protection afforded by
the law. It also explains why the author or the creator enjoys no more rights than are consistent with public welfare.
Further, as correctly observed by the Court of Appeals, the must-carry rule as well as the legislative franchises
granted to both ABS-CBN and PMSI are in consonance with state policies enshrined in the Constitution, specifically
Sections 9, 17, and 24 of Article II on the Declaration of Principles and State Policies.
ABS-CBN was granted a legislative franchise under Republic Act No. 7966, Section 1 of which authorizes it “to
construct, operate and maintain, for commercial purposes and in the public interest, television and radio
broadcasting in and throughout the Philippines x x x.” Section 4 thereof mandates that it “shall provide adequate
public service time to enable the government, through the said broadcasting stations, to reach the population on
important public issues; provide at all times sound and balanced programming; promote public participation such as
in community programming; assist in the functions of public information and education x x x.”
PMSI was likewise granted a legislative franchise under Republic Act No. 8630, Section 4 of which similarly states
that it “shall provide adequate public service time to enable the government, through the said broadcasting stations,
to reach the population on important public issues; provide at all times sound and balanced programming; promote
public participation such as in community programming; assist in the functions of public information and education
x x x.” Section 5, paragraph 2 of the same law provides that “the radio spectrum is a finite resource that is a part of
the national patrimony and the use thereof is a privilege conferred upon the grantee by the State and may be
withdrawn anytime, after due process.”
In Telecom. & Broadcast Attys. of the Phils., Inc. v. COMELEC, the Court held that a franchise is a mere privilege
which may be reasonably burdened with some form of public service. Thus:
“All broadcasting, whether by radio or by television stations, is licensed by the government. Airwave frequencies
have to be allocated as there are more individuals who want to broadcast than there are frequencies to assign. A
franchise is thus a privilege subject, among other things, to amendment by Congress in accordance with the
constitutional provision that “any such franchise or right granted . . . shall be subject to amendment, alteration or
repeal by the Congress when the common good so requires.”
xxxx
Indeed, provisions for COMELEC Time have been made by amendment of the franchises of radio and television
broadcast stations and, until the present case was brought, such provisions had not been thought of as taking
property without just compensation. Art. XII, §11 of the Constitution authorizes the amendment of franchises for
“the common good.” What better measure can be conceived for the common good than one for free air time for the
benefit not only of candidates but even more of the public, particularly the voters, so that they will be fully informed
of the issues in an election? “[I]t is the right of the viewers and listeners, not the right of the broadcasters, which is
paramount.”
Nor indeed can there be any constitutional objection to the requirement that broadcast stations give free air time.
Even in the United States, there are responsible scholars who believe that government controls on broadcast media
can constitutionally be instituted to ensure diversity of views and attention to public affairs to further the system of
free expression. For this purpose, broadcast stations may be required to give free air time to candidates in an
election. Thus, Professor Cass R. Sunstein of the University of Chicago Law School, in urging reforms in regulations
affecting the broadcast industry, writes:
xxxx
In truth, radio and television broadcasting companies, which are given franchises, do not own the airwaves and
frequencies through which they transmit broadcast signals and images. They are merely given the temporary
privilege of using them. Since a franchise is a mere privilege, the exercise of the privilege may reasonably be
burdened with the performance by the grantee of some form of public service. x x x”
There is likewise no merit to ABS-CBN’s claim that PMSI’s carriage of its signals is for a commercial purpose; that its
being the country’s top broadcasting company, the availability of its signals allegedly enhances PMSI’s attractiveness
to potential customers; or that the unauthorized carriage of its signals by PMSI has created competition between its
Metro Manila and regional stations.
ABS-CBN presented no substantial evidence to prove that PMSI carried its signals for profit; or that such carriage
adversely affected the business operations of its regional stations. Except for the testimonies of its witnesses, no
studies, statistical data or information have been submitted in evidence.
Administrative charges cannot be based on mere speculation or conjecture. The complainant has the burden of
proving by substantial evidence the allegations in the complaint. Mere allegation is not evidence, and is not
equivalent to proof.
Anyone in the country who owns a television set and antenna can receive ABS-CBN’s signals for free. Other
broadcasting organizations with free-to-air signals such as GMA-7, RPN-9, ABC-5, and IBC-13 can likewise be
accessed for free. No payment is required to view the said channels because these broadcasting networks do not
generate revenue from subscription from their viewers but from airtime revenue from contracts with commercial
advertisers and producers, as well as from direct sales.
In contrast, cable and DTH television earn revenues from viewer subscription. In the case of PMSI, it offers its
customers premium paid channels from content providers like Star Movies, Star World, Jack TV, and AXN, among
others, thus allowing its customers to go beyond the limits of “Free TV and Cable TV.” It does not advertise itself as
a local channel carrier because these local channels can be viewed with or without DTH television.
Relevantly, PMSI’s carriage of Channels 2 and 23 is material in arriving at the ratings and audience share of ABS-
CBN and its programs. These ratings help commercial advertisers and producers decide whether to buy airtime from
the network. Thus, the must-carry rule is actually advantageous to the broadcasting networks because it provides
them with increased viewership which attracts commercial advertisers and producers.
On the other hand, the carriage of free-to-air signals imposes a burden to cable and DTH television providers such
as PMSI. PMSI uses none of ABS-CBN’s resources or equipment and carries the signals and shoulders the costs
without any recourse of charging.
Moreover, such carriage of signals takes up channel space which can otherwise be utilized for other premium paid
channels.
There is no merit to ABS-CBN’s argument that PMSI’s carriage of Channels 2 and 23 resulted in competition between
its Metro Manila and regional stations. ABS-CBN is free to decide to pattern its regional programming in accordance
with perceived demands of the region; however, it cannot impose this kind of programming on the regional viewers
who are also entitled to the free-to-air channels. It must be emphasized that, as a national broadcasting
organization, one of ABS-CBN’s responsibilities is to scatter its signals to the widest area of coverage as possible.
That it should limit its signal reach for the sole purpose of gaining profit for its regional stations undermines public
interest and deprives the viewers of their right to access to information.
Indeed, television is a business; however, the welfare of the people must not be sacrificed in the pursuit of profit.
The right of the viewers and listeners to the most diverse choice of programs available is paramount. The Director-
General correctly observed, thus:
“The “Must-Carry Rule” favors both broadcasting organizations and the public. It prevents cable television companies
from excluding broadcasting organization especially in those places not reached by signal. Also, the rule prevents
cable television companies from depriving viewers in far-flung areas the enjoyment of programs available to city
viewers. In fact, this Office finds the rule more burdensome on the part of the cable television companies. The latter
carries the television signals and shoulders the costs without any recourse of charging. On the other hand, the
signals that are carried by cable television companies are dispersed and scattered by the television stations and
anybody with a television set is free to pick them up.
With its enormous resources and vaunted technological capabilities, Appellee’s [herein petitioner ABS-CBN]
broadcast signals can reach almost every corner of the archipelago. That in spite of such capacity, it chooses to
maintain regional stations, is a business decision. That the “Must-Carry Rule” adversely affects the profitability of
maintaining such regional stations since there will be competition between them and its Metro Manila station is
speculative and an attempt to extrapolate the effects of the rule. As discussed above, Appellant’s DTH satellite
television services is of limited subscription. Thre was not even a showing on part of the Appellee the number of
Appellant’s subscribers in one region as compared to non-subscribing television owners. In any event, if this Office is
to engage in conjecture, such competition between the regional stations and the Metro Manila station will benefit the
public as such competition will most likely result in the production of better television programs.”
All told, we find that the Court of Appeals correctly upheld the decision of the IPO Director-General that PMSI did not
infringe on ABS-CBN’s intellectual property rights under the IP Code. The findings of facts of administrative bodies
charged with their specific field of expertise, are afforded great weight by the courts, and in the absence of
substantial showing that such findings are made from an erroneous estimation of the evidence presented, they are
conclusive, and in the interest of stability of the governmental structure, should not be disturbed.
Moreover, the factual findings of the Court of Appeals are conclusive on the parties and are not reviewable by the
Supreme Court. They carry even more weight when the Court of Appeals affirms the factual findings of a lower fact-
finding body, as in the instant case.
There is likewise no merit to ABS-CBN’s contention that the Memorandum Circular excludes from its coverage DTH
television services such as those provided by PMSI. Section 6.2 of the Memorandum Circular requires all cable
television system operators operating in a community within Grade “A” or “B” contours to carry the television signals
of the authorized television broadcast stations. The rationale behind its issuance can be found in the whereas
clauses which state:
“Whereas, Cable Television Systems or Community Antenna Television (CATV) have shown their ability to offer
additional programming and to carry much improved broadcast signals in the remote areas, thereby enriching the
lives of the rest of the population through the dissemination of social, economic, educational information and cultural
programs;
Whereas, the national government supports the promotes the orderly growth of the Cable Television industry within
the framework of a regulated fee enterprise, which is a hallmark of a democratic society;
Whereas, public interest so requires that monopolies in commercial mass media shall be regulated or prohibited,
hence, to achieve the same, the cable TV industry is made part of the broadcast media;
Whereas, pursuant to Act 3846 as amended and Executive Order 205 granting the National Telecommunications
Commission the authority to set down rules and regulations in order to protect the public and promote the general
welfare, the National Telecommunications Commission hereby promulgates the following rules and regulations on
Cable Television Systems;”
The policy of the Memorandum Circular is to carry improved signals in remote areas for the good of the general
public and to promote dissemination of information. In line with this policy, it is clear that DTH television should be
deemed covered by the Memorandum Circular. Notwithstanding the different technologies employed, both DTH and
cable television have the ability to carry improved signals and promote dissemination of information because they
operate and function in the same way.
In its December 20, 2002 letter, the NTC explained that both DTH and cable television services are of a similar
nature, the only difference being the medium of delivering such services. They can carry broadcast signals to the
remote areas and possess the capability to enrich the lives of the residents thereof through the dissemination of
social, economic, educational information and cultural programs. Consequently, while the Memorandum Circular
refers to cable television, it should be understood as to include DTH television which provides essentially the same
services.
In Eastern Telecommunications Philippines, Inc. v. International Communication Corporation, we held:
“The NTC, being the government agency entrusted with the regulation of activities coming under its special and
technical forte, and possessing the necessary rule-making power to implement its objectives, is in the best position
to interpret its own rules, regulations and guidelines. The Court has consistently yielded and accorded great respect
to the interpretation by administrative agencies of their own rules unless there is an error of law, abuse of power,
lack of jurisdiction or grave abuse of discretion clearly conflicting with the letter and spirit of the law.”
With regard to the issue of the constitutionality of the must-carry rule, the Court finds that its resolution is not
necessary in the disposition of the instant case. One of the essential requisites for a successful judicial inquiry into
constitutional questions is that the resolution of the constitutional question must be necessary in deciding the case.
In Spouses Mirasol v. Court of Appeals, we held:
“As a rule, the courts will not resolve the constitutionality of a law, if the controversy can be settled on other
grounds. The policy of the courts is to avoid ruling on constitutional questions and to presume that the acts of the
political departments are valid, absent a clear and unmistakable showing to the contrary. To doubt is to sustain. This
presumption is based on the doctrine of separation of powers. This means that the measure had first been carefully
studied by the legislative and executive departments and found to be in accord with the Constitution before it was
finally enacted and approved.”
The instant case was instituted for violation of the IP Code and infringement of ABS-CBN’s broadcasting rights and
copyright, which can be resolved without going into the constitutionality of Memorandum Circular No. 04-08-88. As
held by the Court of Appeals, the only relevance of the circular in this case is whether or not compliance therewith
should be considered manifestation of lack of intent to commit infringement, and if it is, whether such lack of intent
is a valid defense against the complaint of petitioner.
The records show that petitioner assailed the constitutionality of Memorandum Circular No. 04-08-88 by way of a
collateral attack before the Court of Appeals. In Philippine National Bank v. Palma, we ruled that for reasons of
public policy, the constitutionality of a law cannot be collaterally attacked. A law is deemed valid unless declared null
and void by a competent court; more so when the issue has not been duly pleaded in the trial court.
As a general rule, the question of constitutionality must be raised at the earliest opportunity so that if not raised in
the pleadings, ordinarily it may not be raised in the trial, and if not raised in the trial court, it will not be considered
on appeal. In Philippine Veterans Bank v. Court of Appeals, we held:
“We decline to rule on the issue of constitutionality as all the requisites for the exercise of judicial review are not
present herein. Specifically, the question of constitutionality will not be passed upon by the Court unless, at the first
opportunity, it is properly raised and presented in an appropriate case, adequately argued, and is necessary to a
determination of the case, particularly where the issue of constitutionality is the very lis mota presented. x x x”
Finally, we find that the dismissal of the petition for contempt filed by ABS-CBN is in order.
Indirect contempt may either be initiated (1) motu proprio by the court by issuing an order or any other formal
charge requiring the respondent to show cause why he should not be punished for contempt or (2) by the filing of a
verified petition, complying with the requirements for filing initiatory pleadings.
ABS-CBN filed a verified petition before the Court of Appeals, which was docketed CA-G.R. SP No. 90762, for PMSI’s
alleged disobedience to the Resolution and Temporary Restraining Order, both dated July 18, 2005, issued in CA-
G.R. SP No. 88092. However, after the cases were consolidated, the Court of Appeals did not require PMSI to
comment on the petition for contempt. It ruled on the merits of CA-G.R. SP No. 88092 and ordered the dismissal of
both petitions.
ABS-CBN argues that the Court of Appeals erred in dismissing the petition for contempt without having ordered
respondents to comment on the same. Consequently, it would have us reinstate CA-G.R. No. 90762 and order
respondents to show cause why they should not be held in contempt.
It bears stressing that the proceedings for punishment of indirect contempt are criminal in nature. The modes of
procedure and rules of evidence adopted in contempt proceedings are similar in nature to those used in criminal
prosecutions. While it may be argued that the Court of Appeals should have ordered respondents to comment, the
issue has been rendered moot in light of our ruling on the merits. To order respondents to comment and have the
Court of Appeals conduct a hearing on the contempt charge when the main case has already been disposed of in
favor of PMSI would be circuitous. Where the issues have become moot, there is no justiciable controversy, thereby
rendering the resolution of the same of no practical use or value.
WHEREFORE, the petition is DENIED. The July 12, 2006 Decision of the Court of Appeals in CA-G.R. SP Nos. 88092
and 90762, sustaining the findings of the Director-General of the Intellectual Property Office.
——o0o——
MANLY SPORTWEAR MANUFACTURING, INC., petitioner, vs. DADODETTE ENTERPRISES AND/OR
HERMES SPORTS CENTER, respondents
G.R. No. 165306. September 20, 2005
Searches and Seizures; Search Warrants; Quashal of Warrants; Courts; After the judge has issued a warrant, he is
not precluded to subsequently quash the same, if he finds upon reevaluation of the evidence that no probable cause
exists. — The power to issue search warrants is exclusively vested with the trial judges in the exercise of Manly
Sportwear Manufacturing, Inc. vs. Dadodette Enterprises their judicial function. As such, the power to quash the
same also rests solely with them. After the judge has issued a warrant, he is not precluded to subsequently quash
the same, if he finds upon reevaluation of the evidence that no probable cause exists. Our ruling in Solid Triangle
Sales Corp. v. Sheriff, RTC, Q.C., Br. 93 is instructive, thus: Inherent in the courts’ power to issue search warrants is
the power to quash warrants already issued. In this connection, this Court has ruled that the motion to quash should
be filed in the court that issued the warrant unless a criminal case has already been instituted in another court, in
which case, the motion should be filed with the latter. The ruling has since been incorporated in Rule 126 of the
Revised Rules of Criminal Procedure.
Same; Same; Same; Intellectual Property Code of the Philippines (R.A. No. 8293); Copyrights; Where the
copyrighted products do not appear to be original creations and are not among the classes of work enumerated
under Section 172 of RA 8293, the trial court may not be faulted for overturning its initial assessment that there was
probable cause to issue search warrant and to quash the same.—In the instant case, we find that the trial court did
not abuse its discretion when it entertained the motion to quash considering that no criminal action has yet been
instituted when it was filed. The trial court also properly quashed the search warrant it earlier issued after finding
upon re-evaluation of the evidence that no probable cause exists to justify its issuance in the first place. As ruled by
the trial court, the copyrighted products do not appear to be original creations of MANLY and are not among the
classes of work enumerated under Section 172 of RA 8293. The trial court, thus, may not be faulted for overturning
its initial assessment that there was probable cause in view of its inherent power to issue search warrants and to
quash the same. No objection may be validly posed to an order quashing a warrant already issued as the court must
be provided with the opportunity to correct itself of an error unwittingly committed, or, with like effect, to allow the
aggrieved party the chance to convince the court that its ruling is erroneous.
Same; Same; Same; Same; Same; In determination of the existence of probable cause for the issuance or quashal
of a warrant, it is inevitable that the court may touch on issues properly threshed out in a regular proceeding.—The
trial court was acting within bounds when it ruled, in an ancillary proceeding, that the copyrighted products of
petitioner are not original creations. This is because in the determination of the existence of probable cause for the
issuance or quashal of a warrant, it is inevitable that the court may touch on issues properly threshed out in a
regular proceeding. In so doing, it does not usurp the power of, much less preclude, the court from making a final
judicial determination of the issues in a full-blown trial. Consequently, MANLY’s assertion that the trial court’s order
quashing the warrant pre-empted the finding of the intellectual property court has no legal basis.
Same; Same; Same; Same; Same; Actions; The order quashing a search warrant is not res judicata on the issue of
copyright infringement—the applicant for a search warrant could still file a separate copyright infringement suit
against the respondents.—As correctly observed by the Court of Appeals, the trial court’s finding that the seized
products are not copyrightable was merely preliminary as it did not finally and permanently adjudicate on the status
and character of the seized items. MANLY could still file a separate copyright infringement suit against the
respondents because the order for the issuance or quashal of a warrant is not res judicata. Thus, in Vlasons
Enterprises Corporation v. Court of Appeals we held that: The proceeding for the seizure of property in virtue of a
search warrant does not end with the actual taking of the property by the proper officers and its delivery, usually
constructive, to the court. The order for the issuance of the warrant is not a final one and cannot constitute res
judicata. Such an order does not ascertain and adjudicate the permanent status or character of the seized property.
By its very nature, it is provisional, interlocutory. It is merely the first step in the process to determine the character
and title of the property. That determination is done in the criminal action involving the crime or crimes in
connection with which the search warrant was issued. Hence, such a criminal action should be prosecuted, or
commenced if not yet instituted, and prosecuted. The outcome of the criminal action will dictate the disposition of
the seized property . . .
Same; Same; Same; Same; Same; Where there is sufficient proof that the copyrighted products are not original
creations but are readily available in the market under various brands, validity and originality will not be presumed
and the trial court may properly quash the issued warrant for lack of probable cause.—The copyright certificates
issued in favor of MANLY constitute merely prima facie evidence of validity and ownership. However, no presumption
of validity is created where other evidence exist that may cast doubt on the copyright validity. Hence, where there is
sufficient proof that the copyrighted products are not original creations but are readily available in the market under
various brands, as in this case, validity and originality will not be presumed and the trial court may properly quash
the issued warrant for lack of probable cause.
Intellectual Property Code of the Philippines (R.A. No. 8293); Copyright Law; Certificates of registration and deposit
issued by the National Library and the Supreme Court Library serve merely as a notice of recording and registration
of the work but do not confer any right or title upon the registered copyright owner or automatically put his work
under the protective mantle of the copyright law.—At most, the certificates of registration and deposit issued by the
National Library and the Supreme Court Library serve merely as a notice of recording and registration of the work
but do not confer any right or title upon the registered copyright owner or automatically put his work under the
protective mantle of the copyright law. It is not a conclusive proof of copyright ownership. As it is, non-registration
and deposit of the work within the prescribed period only makes the copyright owner liable to pay a fine.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
 The Law Firm of Contacto Nievales & Associates for petitioner.
Sapalo & Velez for respondent.
YNARES-SANTIAGO, J.:
This petition for review on certiorari under Rule 45 of the Revised Rules of Civil Procedure assails the July 13, 2004
decision of the Court of Appeals in CA-G.R. SP No. 79887 and its September 15, 2004 resolution denying
reconsideration thereof.
The facts are as follows:
On March 14, 2003, Special Investigator Eliezer P. Salcedo of the National Bureau of Investigation (NBI) applied for
a search warrant before the Regional Trial Court (RTC) of Quezon City, based on the information that Dadodette
Enterprises and/or Hermes Sports Center were in possession of goods, the copyright of which belonged to Manly
Sportswear Mfg., Inc. (MANLY).
After finding reasonable grounds that a violation of Sections 172 and 217 of Republic Act (RA) No. 8293 has been
committed, Judge Estrella T. Estrada of RTC-Quezon City, Branch 83, issued on March 17, 2003 Search Warrant No.
4044(03).
Respondents thereafter moved to quash and annul the search warrant contending that the same is invalid since the
requisites for its issuance have not been complied with. They insisted that the sporting goods manufactured by
and/or registered in the name of MANLY are ordinary and common hence, not among the classes of work protected
under Section 172 of RA 8293.
On June 10, 2003, the trial court granted the motion to quash and declared Search Warrant No. 4044(03) null and
void based on its finding that the copyrighted products of MANLY do not appear to be original creations and were
being manufactured and distributed by different companies locally and abroad under various brands, and therefore
unqualified for protection under Section 172 of RA 8293. Moreover, MANLY’s certificates of registrations were issued
only in 2002, whereas there were certificates of registrations for the same sports articles which were issued earlier
than MANLY’s, thus further negating the claim that its copy-righted products were original creations.
On August 11, 2003, the trial court denied MANLY’s motion for reconsideration. Hence it filed a petition for certiorari
before the Court of Appeals which was denied for lack of merit. The appellate court found that the trial court
correctly granted the motion to quash and that its ruling in the ancillary proceeding did not preempt the findings of
the intellectual property court as it did not resolve with finality the status or character of the seized items.
After denial of its motion for reconsideration on September 15, 2004, MANLY filed the instant petition for review on
certiorari raising the sole issue of whether or not the Court of Appeals erred in finding that the trial court did not
gravely abuse its discretion in declaring in the hearing for the quashal of the search warrant that the copyrighted
products of MANLY are not original creations subject to the protection of RA 8293.
We deny the petition.
The power to issue search warrants is exclusively vested with the trial judges in the exercise of their judicial
function. As such, the power to quash the same also rests solely with them. After the judge has issued a warrant, he
is not precluded to subsequently quash the same, if he finds upon re-evaluation of the evidence that no probable
cause exists.
Our ruling in Solid Triangle Sales Corp. v. Sheriff, RTC, Q.C., Br. 93 is instructive, thus:
Inherent in the courts’ power to issue search warrants is the power to quash warrants already issued. In this
connection, this Court has ruled that the motion to quash should be filed in the court that issued the warrant unless
a criminal case has already been instituted in another court, in which case, the motion should be filed with the latter.
The ruling has since been incorporated in Rule 126 of the Revised Rules of Criminal Procedure[.]
In the instant case, we find that the trial court did not abuse its discretion when it entertained the motion to quash
considering that no criminal action has yet been instituted when it was filed. The trial court also properly quashed
the search warrant it earlier issued after finding upon re-evaluation of the evidence that no probable cause exists to
justify its issuance in the first place. As ruled by the trial court, the copyrighted products do not appear to be original
creations of MANLY and are not among the classes of work enumerated under Section 172 of RA 8293. The trial
court, thus, may not be faulted for overturning its initial assessment that there was probable cause in view of its
inherent power to issue search warrants and to quash the same. No objection may be validly posed to an order
quashing a warrant already issued as the court must be provided with the opportunity to correct itself of an error
unwittingly committed, or, with like effect, to allow the aggrieved party the chance to convince the court that its
ruling is erroneous.
Moreover, the trial court was acting within bounds when it ruled, in an ancillary proceeding, that the copyrighted
products of petitioner are not original creations. This is because in the determination of the existence of probable
cause for the issuance or quashal of a warrant, it is inevitable that the court may touch on issues properly threshed
out in a regular proceeding. In so doing, it does not usurp the power of, much less preclude, the court from making
a final judicial determination of the issues in a full-blown trial. Consequently, MANLY’s assertion that the trial court’s
order quashing the warrant pre-empted the finding of the intellectual property court has no legal basis.
As pertinently held in Solid Triangle Sales Corp. v. Sheriff, RTC, Q.C., Br. 93:
“When the court, in determining probable cause for issuing or quashing a search warrant, finds that no offense has
been committed, it does not interfere with or encroach upon the proceedings in the preliminary investigation. The
court does not oblige the investigating officer not to file an information for the court’s ruling that no crime exists is
only for purposes of issuing or quashing the warrant. This does not, as petitioners would like to believe, constitute a
usurpation of the executive function. Indeed, to shirk from this duty would amount to an abdication of a
constitutional obligation.
...
. . . The finding by the court that no crime exists does not preclude the authorized officer conducting the preliminary
investigation from making his own determination that a crime has been committed and that probable cause exists
for purposes of filing the information.”
As correctly observed by the Court of Appeals, the trial court’s finding that the seized products are not copyrightable
was merely preliminary as it did not finally and permanently adjudicate on the status and character of the seized
items. MANLY could still file a separate copyright infringement suit against the respondents because the order for
the issuance or quashal of a warrant is not res judicata.
Thus, in Vlasons Enterprises Corporation v. Court of Appeals we held that:
“The proceeding for the seizure of property in virtue of a search warrant does not end with the actual taking of the
property by the proper officers and its delivery, usually constructive, to the court. The order for the issuance of the
warrant is not a final one and cannot constitute res judicata. Such an order does not ascertain and adjudicate the
permanent status or character of the seized property. By its very nature, it is provisional, interlocutory. It is merely
the first step in the process to determine the character and title of the property. That determination is done in the
criminal action involving the crime or crimes in connection with which the search warrant was issued. Hence, such a
criminal action should be prosecuted, or commenced if not yet instituted, and prosecuted. The outcome of the
criminal action will dictate the disposition of the seized property . . .”
We have also ruled in Ching v. Salinas, Sr., et al. that:
“The RTC had jurisdiction to delve into and resolve the issue whether the petitioner’s utility models are copyrightable
and, if so, whether he is the owner of a copyright over the said models. It bears stressing that upon the filing of the
application for search warrant, the RTC was duty-bound to determine whether probable cause existed, in accordance
with Section 4, Rule 126 of the Rules of Criminal Procedure[.]”
Further, the copyright certificates issued in favor of MANLY constitute merely prima facie evidence of validity and
ownership. However, no presumption of validity is created where other evidence exist that may cast doubt on the
copyright validity. Hence, where there is sufficient proof that the copyrighted products are not original creations but
are readily available in the market under various brands, as in this case, validity and originality will not be presumed
and the trial court may properly quash the issued warrant for lack of probable cause.
Besides, no copyright accrues in favor of MANLY despite issuance of the certificates of registration and deposit
pursuant to Section 2, Rule 7 of the Copyrights Safeguards and Regulations17 which states:
Sec. 2. Effects of Registration and Deposit of Work.—The registration and deposit of the work is purely for recording
the date of registration and deposit of the work and shall not be conclusive as to copyright ownership or the term of
the copyrights or the rights of the copyright owner, including neighboring rights.
At most, the certificates of registration and deposit issued by the National Library and the Supreme Court Library
serve merely as a notice of recording and registration of the work but do not confer any right or title upon the
registered copyright owner or automatically put his work under the protective mantle of the copyright law. It is not a
conclusive proof of copyright ownership. As it is, non-registration and deposit of the work within the prescribed
period only makes the copyright owner liable to pay a fine.18
WHEREFORE, the petition is DENIED. The July 13, 2004 decision of the Court of Appeals in CA-G.R. SP No. 79887
and resolution dated September 15, 2004, are AFFIRMED.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Quisumbing, Carpio and Azcuna, JJ., concur.
Petition denied, judgment and resolution affirmed.
Notes. — To be entitled to copyright, the thing being copyrighted must be original, created by the author through
his own skill, labor and judgment, without directly copying or evasively imitating the work of another. (Samber vs.
Levi Strauss & Co., 378 SCRA 364 [2002])
Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one
another. (Kho vs. Court of Appeals, 379 SCRA 410 [2002])
——o0o——
PACITA I. HABANA, ALICIA L. CINCO and JOVITA N. FERNANDO, petitioners, vs. FELICIDAD C. ROBLES
and GOODWILL TRADING CO., INC., respondents
G.R. No. 131522. July 19, 1999
Copyright Law; Statutes; Republic Act No. 8293; At present, all laws dealing with the protection of intellectual
property rights have been consolidated and as the law now stands, the protection of copyrights is governed by
Republic Act No. 8293. — The complaint for copyright infringement was filed at the time that Presidential Decree No.
49 was in force. At present, all laws dealing with the protection of intellectual property rights have been consolidated
and as the law now stands, the protection of copyrights is governed by Republic Act No. 8293. Notwithstanding the
change in the law, the same principles are reiterated in the new law under Section 177.
Same; Infringement of Copyright; If so much is taken that the value of the original work is substantially diminished,
there is an infringement of copyright and to an injurious extent, the work is appropriated. — We believe that
respondent Robles’ act of lifting from the book of petitioners substantial portions of discussions and examples, and
her failure to acknowledge the same in her book is an infringement of petitioners’ copyrights. When is there a
substantial reproduction of a book? It does not necessarily require that the entire copyrighted work, or even a large
portion of it, be copied. If so much is taken that the value of the original work is substantially diminished, there is an
infringement of copyright and to an injurious extent, the work is appropriated.
Same; Same; Intellectual Piracy; Words and Phrases; Infringement of copyright, or piracy, which is a synonymous
term in this connection, consists in doing by any person, without the consent of the owner of the copyright, of
anything the sole right to do which is conferred by statute on the owner of the copyright. — In determining the
question of infringement, the amount of matter copied from the copyrighted work is an important consideration. To
constitute infringement, it is not necessary that the whole or even a large portion of the work shall have been
copied. If so much is taken that the value of the original is sensibly diminished, or the labors of the original author
are substantially and to an injurious extent appropriated by another, that is sufficient in point of law to constitute
piracy. The essence of intellectual piracy should be essayed in conceptual terms in order to underscore its gravity by
an appropriate understanding thereof. Infringement of a copyright is a trespass on a private domain owned and
occupied by the owner of the copyright, and, therefore, protected by law, and infringement of copyright, or piracy,
which is a synonymous term in this connection, consists in the doing by any person, without the consent of the
owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright.
Same; Same; Same; Even if two authors were of the same background in terms of teaching experience and
orientation, it is not an excuse for them to be identical even in examples contained in their books.—The respondents
claim that their similarity in style can be attributed to the fact that both of them were exposed to the APCAS syllabus
and their respective academic experience, teaching approach and methodology are almost identical because they
were of the same background. However, we believe that even if petitioners and respondent Robles were of the same
background in terms of teaching experience and orientation, it is not an excuse for them to be identical even in
examples contained in their books. The similarities in examples and material contents are so obviously present in this
case. How can similar/identical examples not be considered as a mark of copying?
Same; Same; Same; In cases of infringement, copying alone is not what is prohibited—the copying must produce an
“injurious effect.”—In cases of infringement, copying alone is not what is prohibited. The copying must produce an
“injurious effect.” Here, the injury consists in that respondent Robles lifted from petitioners’ book materials that were
the result of the latter’s research work and compilation and misrepresented them as her own. She circulated the
book DEP for commercial use and did not acknowledge petitioners as her source.
Same; Same; Same; In copyrighting books the purpose is to give protection to the intellectual product of an author.
— Hence, there is a clear case of appropriation of copyrighted work for her benefit that respondent Robles
committed. Petitioners’ work as authors is the product of their long and assiduous research and for another to
represent it as her own is injury enough. In copyrighting books the purpose is to give protection to the intellectual
product of an author. This is precisely what the law on copyright protected, under Section 184.1 (b). Quotations
from a published work if they are compatible with fair use and only to the extent justified by the purpose, including
quotations from newspaper articles and periodicals in the form of press summaries are allowed provided that the
source and the name of the author, if appearing on the work, are mentioned.
Same; Same; Same; To allow another to copy a book without appropriate acknowledgment is injury enough. — In
the case at bar, the least that respondent Robles could have done was to acknowledge petitioners Habana, et al. as
the source of the portions of DEP. The final product of an author’s toil is her book. To allow another to copy the
book without appropriate acknowledgment is injury enough.
DAVIDE, JR., C.J., Dissenting Opinion:
Copyright Law; The copyright protection extended to the creator should ensure his attainment of some form of
personal satisfaction and economic reward from the work he produced.—Stripped in the meantime of its indisputable
social and beneficial functions, the use of intellectual property or creations should basically promote the creator or
author’s personal and economic gain. Hence, the copyright protection extended to the creator should ensure his
attainment of some form of personal satisfaction and economic reward from the work he produced.
Same; Infringement of Copyright; Intellectual Piracy; Words and Phrases; In essence copyright infringement, known
in general as “piracy,” is a trespass on a domain owned and occupied by a copyright owner—it is a violation of a
private right protected by law.—The execution, therefore, of any one or more of the exclusive rights conferred by
law on a copyright owner, without his consent, constitutes copyright infringement. In essence, copyright
infringement, known in general as “piracy,” is a trespass on a domain owned and occupied by a copyright owner; it
is violation of a private right protected by law. With the invasion of his property rights, a copyright owner is naturally
entitled to seek redress, enforce and hold accountable the defrauder or usurper of said economic rights.
Same; Same; Same; The test of copyright infringement is whether an ordinary observer comparing the works can
readily see that one has been copied from the other.—To constitute infringement, the usurper must have copied or
appropriated the “original” work of an author or copyright proprietor; absent copying, there can be no infringement
of copyright. In turn, a work is deemed by law an original if the author created it by his own skill, labor and
judgment. On its part, a copy is that which comes so near to the original so as to give to every person seeing it the
idea created by the original. It has been held that the test of copyright infringement is whether an ordinary observer
comparing the works can readily see that one has been copied from the other. A visual comparison of the portions of
CET juxtaposed against certain pages of DEP, would inescapably lead to a conclusion that there is a discernible
similarity between the two; however, as correctly assessed by respondent court and the lower court, no conclusion,
can be drawn that DEP, in legal contemplation, is a copy of CET.
Same; Same; Same; To constitute a substantial reproduction, it is not necessary that the entire copyrighted work, or
even a large portion of it, be copied, if so much is taken that the value of the original is substantially diminished, or
if the labors of the original author are substantially, and to an injurious extent, appropriated.—Was DEP a substantial
reproduction of CET? To constitute a substantial reproduction, it is not necessary that the entire copyrighted work,
or even a large portion of it, be copied, if so much is taken that the value of the original is substantially diminished,
or if the labors of the original author are substantially, and to an injurious extent, appropriated. But the similarity of
the books here does not amount to an appropriation of a substantial portion of CET. If the existence of substantial
similarities does not of itself establish infringement, mere similarities (not substantial similarities) in some sections of
the books in question decisively militate against a claim for infringement where the similarities had been convincingly
established as proceeding from a number of reasons and/or factors.
Same; Same; Same; Words and Phrases; Fair use has been defined as a privilege to use the copyrighted material in
a reasonable manner without the consent of the copyright owner or as copying the theme or the ideas rather than
their expression.—Fair use has been defined as a privilege to use the copyrighted material in a reasonable manner
without the consent of the copyright owner or as copying the theme or ideas rather than their expression. No
question of fair or unfair use arises however, if no copying is proved to begin with. This is in consonance with the
principle that there can be no infringement if there was no copying. It is only where some form of copying has been
shown that it becomes necessary to determine whether it has been carried to an “unfair,” that is, illegal, extent.
Consequently, there is no reason to address the issue of whether ROBLES abused a writer’s right to fair use with the
ascertainment that DEP was not a copy or a substantial copy of CET.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Jesus R. Cornago for petitioners.
Crisanto L. Francisco & Associates for Felicidad C. Robles.
Emiliano S. Samson, R. Balderrama-Samson and Mary Anne B. Samson-Willis for Goodwill Trading Co., Inc.
PARDO, J.:
The case before us is a petition for review on certiorari to set aside the (a) decision of the Court of Appeals, and (b)
the resolution denying petitioners’ motion for reconsideration, in which the appellate court affirmed the trial court’s
dismissal of the complaint for infringement and/or unfair competition and damages but deleted the award for
attorney’s fees.
The facts are as follows:
Petitioners are authors and copyright owners of duly issued certificates of copyright registration covering their
published works, produced through their combined resources and efforts, entitled COLLEGE ENGLISH FOR TODAY
(CET for brevity), Books 1 and 2, and WORKBOOK FOR COLLEGE FRESHMAN ENGLISH, Series 1.
Respondent Felicidad Robles and Goodwill Trading Co., Inc. are the author/publisher and distributor/seller of another
published work entitled “DEVELOPING ENGLISH PROFICIENCY” (DEP for brevity), Books 1 and 2 (1985 edition)
which book was covered by copyrights issued to them.
In the course of revising their published works, petitioners scouted and looked around various bookstores to check
on other textbooks dealing with the same subject matter. By chance they came upon the book of respondent Robles
and upon perusal of said book they were surprised to see that the book was strikingly similar to the contents,
scheme of presentation, illustrations and illustrative examples in their own book, CET.
After an itemized examination and comparison of the two books (CET and DEP), petitioners found that several pages
of the respondent’s book are similar, if not all together a copy of petitioners’ book, which is a case of plagiarism and
copyright infringement.
Petitioners then made demands for damages against respondents and also demanded that they cease and desist
from further selling and distributing to the general public the infringed copies of respondent Robles’ works.
However, respondents ignored the demands, hence, on July 7, 1988, petitioners filed with the Regional Trial Court,
Makati, a complaint for “Infringement and/or unfair competition with damages” against private respondents.
In the complaint, petitioners alleged that in 1985, respondent Felicidad C. Robles being substantially familiar with the
contents of petitioners’ works, and without securing their permission, lifted, copied, plagiarized and/or transposed
certain portions of their book CET. The textual contents and illustrations of CET were literally reproduced in the book
DEP. The plagiarism, incorporation and reproduction of particular portions of the book CET in the book DEP, without
the authority or consent of petitioners, and the misrepresentations of respondent Robles that the same was her
original work and concept adversely affected and substantially diminished the sale of the petitioners’ book and
caused them actual damages by way of unrealized income.
Despite the demands of the petitioners for respondents to desist from committing further acts of infringement and
for respondent to recall DEP from the market, respondents refused. Petitioners asked the court to order the
submission of all copies of the book DEP, together with the molds, plates and films and other materials used in its
printing destroyed, and for respondents to render an accounting of the proceeds of all sales and profits since the
time of its publication and sale.
Respondent Robles was impleaded in the suit because she authored and directly committed the acts of infringement
complained of, while respondent Goodwill Trading Co., Inc. was impleaded as the publisher and joint co-owner of
the copyright certificates of registration covering the two books authored and caused to be published by respondent
Robles with obvious connivance with one another.
On July 27, 1988, respondent Robles filed a motion for a bill of particulars which the trial court approved on August
17, 1988. Petitioners complied with the desired particularization, and furnished respondent Robles the specific
portions, inclusive of pages and lines, of the published and copyrighted books of the petitioners which were
transposed, lifted, copied and plagiarized and/or otherwise found their way into respondent’s book.
On August 1, 1988, respondent Goodwill Trading Co., Inc. filed its answer to the complaint and alleged that
petitioners had no cause of action against Goodwill Trading Co., Inc. since it was not privy to the misrepresentation,
plagiarism, incorporation and reproduction of the portions of the book of petitioners; that there was an agreement
between Goodwill and the respondent Robles that Robles guaranteed Goodwill that the materials utilized in the
manuscript were her own or that she had secured the necessary permission from contributors and sources; that the
author assumed sole responsibility and held the publisher without any liability.
On November 28, 1988, respondent Robles filed her answer, and denied the allegations of plagiarism and copying
that petitioners claimed. Respondent stressed that (1) the book DEP is the product of her independent researches,
studies and experiences, and was not a copy of any existing valid copyrighted book; (2) DEP followed the scope and
sequence or syllabus which are common to all English grammar writers as recommended by the Association of
Philippine Colleges of Arts and Sciences (APCAS), so any similarity between the respondents book and that of the
petitioners was due to the orientation of the authors to both works and standards and syllabus; and (3) the
similarities may be due to the authors’ exercise of the “right to fair use of copyrighted materials, as guides.”
Respondent interposed a counterclaim for damages on the ground that bad faith and malice attended the filing of
the complaint, because petitioner Habana was professionally jealous and the book DEP replaced CET as the official
textbook of the graduate studies department of the Far Eastern University.
During the pre-trial conference, the parties agreed to a stipulation of facts and for the trial court to first resolve the
issue of infringement before disposing of the claim for damages.
After the trial on the merits, on April 23, 1993, the trial court rendered its judgment finding thus:
“WHEREFORE, premises considered, the court hereby orders that the complaint filed against defendants Felicidad
Robles and Goodwill Trading Co., Inc. shall be DISMISSED; that said plaintiffs solidarily reimburse defendant Robles
for P20,000.00 attorney’s fees and defendant Goodwill for P5,000.00 attorney’s fees. Plaintiffs are liable for cost of
suit.
IT IS SO ORDERED.
“Done in the City of Manila this 23rd day of April, 1993.
“(s/t) MARVIE R. ABRAHAM SINGSON
“Assisting Judge
“S.C. Adm. Order No. 124-92”
On May 14, 1993, petitioners filed their notice of appeal with the trial court, and on July 19, 1993, the court directed
its branch clerk of court to forward all the records of the case to the Court of Appeals.
In the appeal, petitioners argued that the trial court completely disregarded their evidence and fully subscribed to
the arguments of respondent Robles that the books in issue were purely the product of her researches and studies
and that the copied portions were inspired by foreign authors and as such not subject to copyright. Petitioners also
assailed the findings of the trial court that they were animated by bad faith in instituting the complaint.
On June 27, 1997, the Court of Appeals rendered judgment in favor of respondents Robles and Goodwill Trading
Co., Inc. The relevant portions of the decision state:
“It must be noted, however, that similarity of the allegedly infringed work to the author’s or proprietor’s copyrighted
work does not of itself establish copyright infringement, especially if the similarity results from the fact that both
works deal with the same subject or have the same common source, as in this case.
Appellee Robles has fully explained that the portion or material of the book claimed by appellants to have been
copied or lifted from foreign books. She has duly proven that most of the topics or materials contained in her book,
with particular reference to those matters claimed by appellants to have been plagiarized were topics or matters
appearing not only in appellants and her books but also in earlier books on College English, including foreign books,
i.e. Edmund Burke’s “Speech on Conciliation,” Boerigs’ “Competence in English” and Broughton’s, “Edmund Burke’s
Collection.”
xxx
“Appellant’s reliance on the last paragraph on Section 11 is misplaced. It must be emphasized that they failed to
prove that their books were made sources by appellee.”
The Court of Appeals was of the view that the award of attorneys’ fees was not proper, since there was no bad faith
on the part of petitioners Habana, et al. in instituting the action against respondents.
On July 12, 1997, petitioners filed a motion for reconsideration, however, the Court of Appeals denied the same in a
Resolutiondated November 25, 1997.
Hence, this petition.
In this appeal, petitioners submit that the appellate court erred in affirming the trial court’s decision.
Petitioners raised the following issues: (1) whether or not, despite the apparent textual, thematic and sequential
similarity between DEP and CET, respondents committed no copyright infringement; (2) whether or not there was
animus furandi on the part of respondent when they refused to withdraw the copies of CET from the market despite
notice to withdraw the same; and (3) whether or not respondent Robles abused a writer’s right to fair use, in
violation of Section 11 of Presidential Decree No. 49.
work in graphic form, irrespective of the ownership of the original or the copy which is the subject of
the rental; (n)
177.5 Public display of the original or copy of the work;
177.6 Public performance of the work; and
177.7 Other communication to the public of the work”
The law also provided for the limitations on copyright, thus:
“Sec. 184.1 Limitations on copyright.—Notwithstanding the provisions of Chapter V, the following acts shall not
constitute infringement of copyright:
(a) the recitation or performance of a work, once it has been lawfully made accessible to the public,
if done privately and free of charge or if made strictly for a charitable or religious institution or
society; [Sec. 10(1), P.D. No. 49]
(b) The making of quotations from a published work if they are compatible with fair use and only to
the extent justified for the purpose, including quotations from newspaper articles and periodicals in
the form of press summaries; Provided, that the source and the name of the author, if appearing on
the work are mentioned; (Sec. 11 third par. P.D. 49)x x x xxx xxx
(e)The inclusion of a work in a publication, broadcast, or other communication to the public, sound
recording of film, if such inclusion is made by way of illustration for teaching purposes and is
compatible with fair use: Provided, That the source and the name of the author, if appearing in the
work is mentioned;

We find the petition impressed with merit. In the above quoted provisions, “work” has reference to literary and artistic creations and this includes books and
other literary, scholarly and scientific works.
The complaint for copyright infringement was filed at the time that Presidential Decree No. 49 was in force. At
present, all laws dealing with the protection of intellectual property rights have been consolidated and as the law A perusal of the records yields several pages of the book DEP that are similar if not identical with the text of CET.
now stands, the protection of copyrights is governed by Republic Act No. 8293. Notwithstanding the change in the
On page 404 of petitioners’ Book 1 of College English for Today, the authors wrote:
law, the same principles are reiterated in the new law under Section 177. It provides for the copy or economic rights
of an owner of a copyright as follows: Items in dates and addresses:
“Sec. 177. Copy or Economic rights.—Subject to the provisions of chapter VIII, copyright or economic rights shall He died on Monday, April 15, 1975.
consist of the exclusive right to carry out, authorize or prevent the following acts:
Miss Reyes lives in 214 Taft Avenue,
177.1 Reproduction of the work or substantial portion of the work;
Manila
177.2 Dramatization, translation, adaptation, abridgement, arrangement or other transformation of
the work; On page 73 of respondents Book 1 Developing English Today, they wrote:

177.3 The first public distribution of the original and each copy of the work by sale or other forms of He died on Monday, April 25, 1975.
transfer of ownership;
Miss Reyes address is 214 Taft Avenue Manila
177.4 Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied
in a sound recording, a computer program, a compilation of data and other materials or a musical On Page 250 of CET, there is this example on parallelism or repetition of sentence structures, thus:
“The proposition is peace. Not peace through the medium of war; not peace to be hunted through the labyrinth of
intricate and endless negotiations; not peace to arise out of universal discord, fomented from principle, in all parts of
the empire; not peace to depend on the juridical determination of perplexing questions, or the precise marking of
the boundary of a complex government. It is simple peace; sought in its natural course, and in its ordinary haunts. It
is peace sought in the spirit of peace, and laid in principles purely pacific.
—Edmund Burke, “Speech on Criticism.”
On page 100 of the book DEP, also in the topic of parallel structure and repetition, the same example is found in
toto. The only difference is that petitioners acknowledged the author Edmund Burke, and respondents did not.
In several other pages the treatment and manner of presentation of the topics of DEP are similar if not a rehash of
that contained in CET.
We believe that respondent Robles’ act of lifting from the book of petitioners substantial portions of discussions and
examples, and her failure to acknowledge the same in her book is an infringement of petitioners’ copyrights.
When is there a substantial reproduction of a book? It does not necessarily require that the entire copyrighted work,
or even a large portion of it, be copied. If so much is taken that the value of the original work is substantially
diminished, there is an infringement of copyright and to an injurious extent, the work is appropriated.
In determining the question of infringement, the amount of matter copied from the copyrighted work is an important
consideration. To constitute infringement, it is not necessary that the whole or even a large portion of the work shall
have been copied. If so much is taken that the value of the original is sensibly diminished, or the labors of the
original author are substantially and to an injurious extent appropriated by another, that is sufficient in point of law
to constitute piracy.
The essence of intellectual piracy should be essayed in conceptual terms in order to underscore its gravity by an
appropriate understanding thereof. Infringement of a copyright is a trespass on a private domain owned and
occupied by the owner of the copyright, and, therefore, protected by law, and infringement of copyright, or piracy,
which is a synonymous term in this connection, consists in the doing by any person, without the consent of the
owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright.
The respondents’ claim that the copied portions of the book CET are also found in foreign books and other grammar
books, and that the similarity between her style and that of petitioners can not be avoided since they come from the
same background and orientation may be true. However, in this jurisdiction under Sec. 184 of Republic Act 8293 it is
provided that:
Limitations on Copyright. Notwithstanding the provisions of Chapter V, the following shall not constitute infringement
of copyright:
xxxx xxxx xxxx
(c) The making of quotations from a published work if they are compatible with fair use and only to the extent
justified for the purpose, including quotations from newspaper articles and periodicals in the form of press
summaries: Provided, That the source and the name of the author, if appearing on the work, are mentioned.
A copy of a piracy is an infringement of the original, and it is no defense that the pirate, in such cases, did not know
whether or not he was infringing any copyright; he at least knew that what he was copying was not his, and he
copied at his peril.
The next question to resolve is to what extent can copying be injurious to the author of the book being copied. Is it
enough that there are similarities in some sections of the books or large segments of the books are the same?
In the case at bar, there is no question that petitioners presented several pages of the books CET and DEP that
more or less had the same contents. It may be correct that the books being grammar books may contain materials
similar as to some technical contents with other grammar books, such as the segment about the “Author Card.”
However, the numerous pages that the petitioners presented showing similarity in the style and the manner the
books were presented and the identical examples can not pass as similarities merely because of technical
consideration.
The respondents claim that their similarity in style can be attributed to the fact that both of them were exposed to
the APCAS syllabus and their respective academic experience, teaching approach and methodology are almost
identical because they were of the same background.
However, we believe that even if petitioners and respondent Robles were of the same background in terms of
teaching experience and orientation, it is not an excuse for them to be identical even in examples contained in their
books. The similarities in examples and material contents are so obviously present in this case. How can
similar/identical examples not be considered as a mark of copying?
We consider as an indicia of guilt or wrongdoing the act of respondent Robles of pulling out from Goodwill
bookstores the book DEP upon learning of petitioners’ complaint while pharisaically denying petitioners’ demand. It
was further noted that when the book DEP was re-issued as a revised version, all the pages cited by petitioners to
contain portion of their book College English for Today were eliminated.
In cases of infringement, copying alone is not what is prohibited. The copying must produce an “injurious effect.”
Here, the injury consists in that respondent Robles lifted from petitioners’ book materials that were the result of the
latter’s research work and compilation and misrepresented them as her own. She circulated the book DEP for
commercial use and did not acknowledge petitioners as her source.
Hence, there is a clear case of appropriation of copyrighted work for her benefit that respondent Robles committed.
Petitioners’ work as authors is the product of their long and assiduous research and for another to represent it as her
own is injury enough. In copyrighting books the purpose is to give protection to the intellectual product of an author.
This is precisely what the law on copyright protected, under Section 184.1 (b). Quotations from a published work if
they are compatible with fair use and only to the extent justified by the purpose, including quotations from
newspaper articles and periodicals in the form of press summaries are allowed provided that the source and the
name of the author, if appearing on the work, are mentioned.
In the case at bar, the least that respondent Robles could have done was to acknowledge petitioners Habana, et al.
as the source of the portions of DEP. The final product of an author’s toil is her book. To allow another to copy the
book without appropriate acknowledgment is injury enough.
WHEREFORE, the petition is hereby GRANTED. The decision and resolution of the Court of Appeals in CA-G.R. CV
No. 44053 are SET ASIDE. The case is ordered remanded to the trial court for further proceedings to receive
evidence of the parties to ascertain the damages caused and sustained by petitioners and to render decision in
accordance with the evidence submitted to it.
SO ORDERED.
Kapunan and Ynares-Santiago, JJ., concur.
Davide, Jr. (C.J.), I dissent. Please see dissenting opinion.
Melo, J., No part. Personal reasons.
Petition granted; Reviewed decision and resolution set aside.
Notes. — Cancellation of registration of a trademark has the effect of depriving the registrant of protection from
infringement from the moment judgment or order of cancellation has become final. (Heirs of Crisanta Y. Gabriel-
Almoradie vs. Court of Appeals, 229 SCRA 15 [1994])
While an application for the administrative cancellation of a registered trademark on any of the grounds enumerated
in Section 17 of Republic Act 166 falls under the exclusive cognizance of the Bureau of Patents, Trademarks and
Technology Transfer (BPTTT), an action for infringement or unfair competition, as well as the remedy of injunction
and relief for damages, is explicitly and unquestionably within the competence and jurisdiction of ordinary courts.
(Conrad and Company, Inc. vs. Court of Appeals, 246 SCRA 691 [1995])
A person claiming to be an inventor of an article has no right of property over the same upon which it can maintain
a suit unless it obtains a patent therefor. (Creser Precision Systems, Inc. vs. Court of Appeals, 286 SCRA 13 [1998])
——o0o——
COLUMBIA PICTURES, INC., ORION PICTURES CORP., PARAMOUNT PICTURES CORP., TWENTIETH
CENTURY FOX FILM CORP., UNITED ARTISTS CORP., UNIVERSAL CITY STUDIOS, INC., THE WALT
DISNEY COMPANY, and WARNER BROS., INC., petitioners, vs. HON. JUDGE ALFREDO C. FLORES, FGT
VIDEO NETWORK, INC., MANUEL MENDOZA, ALFREDO C. ONGYANCO, ERIC APOLONIO, SUSAN YANG
and EDUARDO A. YOTOKO, respondents
G.R. No. 78631. June 29, 1993
Constitutional Law; Searches and Seizures; In issuing a search warrant, the Judge must strictly comply with the
constitutional and statutory requirements. — In issuing a search warrant, the judge must strictly comply with the
constitutional and statutory requirements. He must determine the existence of probable cause by personally
examining the applicant and his witnesses in the form of searching questions (Silva vs. Presiding Judge, RTC of
Negros Oriental, Br. XXXIII (203 SCRA 140 [1991]). The search warrant must contain a specific description of the
place to be searched and the articles sought to be seized must be described with particularity.
Same; Same; Same; Court finds that Search Warrant No. 45 fails to satisfy the test of legality. — Withal, measured
by the aforegoing constitutional and legal provisions as well as the existing jurisprudence on the matter, we find that
Search Warrant No. 45 fails to satisfy the test of legality. More so because the Court has previously decided a case
dealing with virtually the same search warrant.
Same; Same; Same; Same; As the search warrant is in the nature of a general one, it is constitutionally
objectionable. — The language used in paragraph (c) of Search Warrant No. 45 is thus too all-embracing as to
include all the paraphernalia of FGT in the operation of its business. As the search warrant is in the nature of a
general one, it is constitutionally objectionable.
PETITION for certiorari to review the order of the Regional Trial Court of Pasig, Br. 167.
The facts are stated in the opinion of the Court.
Siguion Reyna, Montecillo & Ongsiako Law Office for petitioners.
Santos & Associates and San Jose, Enrique, Lucas, Santos & Borje Law Offices for respondents.
MELO, J.:
Before us is a petition for certiorari seeking to set aside the order dated May 29, 1987 of the Regional Trial Court of
the National Capital Region (Branch 167, Pasig) directing the immediate release and return of television sets, video
cassette recorders, rewinders, tape head cleaners, accessories, equipment, and other paraphernalia or pieces of
machinery which had been seized by operatives of the National Bureau of Investigation by virtue of a search
warrant.
Petitioners herein are all foreign corporations organized and existing under the laws of the United States of America
and represented in the Philippines by their attorney-in-fact, Rebecca Benitez-Cruz of the Motion Picture Association
of America, Inc. (MPAA for brevity). Private respondent FGT Video Network, Inc. is a merger of Fox, Galactic, and
Technica Video. It is registered with and licensed by the Videogram Regulatory Board as a distributor under License
No. 1333 VMM. Technica Video, Inc. which is part of the merger, is registered with and licensed as a reproducer by
the said board under License No. 967 VMM (p. 11, Rollo).
In a letter dated April 20, 1987, the MPAA, through counsel Rico V. Domingo, lodged a complaint before then
Director Antonio Carpio of the National Bureau of Investigation (NBI) against certain video establishments for
violation of Presidential Decree No. 49 (Protection of Intellectual Property), as amended by Presidential Decree No.
1988, in connection with its anti-piracy campaign. Specifically complaining of the “unauthorized sale, rental,
reproduction and/or disposition of copyrighted film”, the MPAA sought the NBI’s “urgent assistance in the conduct of
search and seizure operations in Metro Manila and elsewhere”. (p. 29, Rollo.)
On the basis of said letter, NBI and private agents conducted discreet surveillance operations on certain video
establishments, among them private respondent FGT Video Network, Inc. (FGT). Thus, on April 20, 1987, Danilo
Manalang, a.k.a. Ronaldo Lim, allegedly an NBI agent, went to the office of FGT to have the copyrighted motion
pictures “Cleopatra” owned by Twentieth Century Fox Film Corp. and “The Ten Commandments” owned by
Paramount Pictures, Inc. reproduced or retaped in video format. For the reproduction services, FGT issued Order Slip
No. 3482 dated April 20, 1987 and Delivery Slip No. 118667 dated April 22, 1987, for which services Danilo
Manalang paid P45.00. On May 5, 1987, Manalang also had MGM’s copyrighted film “Walk Like a Man” reproduced or
retaped by FGT for P15.00 (p. 5, Rollo).
Consequently, on May 14, 1987, NBI Agent III Lauro C. Reyes, with Manalang and Rebecca Benitez-Cruz as
witnesses, applied for a search warrant with the Regional Trial Court in Pasig. Introduced as evidence in support of
the application were the following: the letter dated April 20, 1987 of the MPAA through Rico V. Domingo (Exh. A)
FGT’s Order Slip No. 3842 (Exh. B); FGT’s Delivery Slip No. 118667 (Exh. B-1); video cassettes containing the film
“The Ten Commandments” (Exhs. B-1-A, B-1-B); video cassette containing the film “Cleopatra” (Exh. B-1-C); video
cassette containing the film “Walk Like a Man” (Exh. B-1-D); FGT’s Order Slip No. 3923 dated May 5, 1987 (Exh. B-
2); FGT’s Delivery Slip No. 123321 dated May 6, 1987 (Exh. B-3); list of copyrighted MPAA member company titles
(Exh. C); sketch of location of FGT’s office or premises (Exh. D); affidavit of Rebecca Benitez-Cruz (Exh. E); special
power of attorney designating Ms. Benitez-Cruz as petitioners’ attorney-in-fact (Exh. F to F-8); and affidavit of Danilo
Manalang (Exh. G).
Upon the offer of these pieces of evidence, Judge Alfredo C. Flores of the aforesaid court, issued Search Warrant No.
45 which reads:
TO ANY PEACE OFFICER:
GREETINGS:
It appearing to the satisfaction of the Undersigned after examining under oath NBI Senior Agent Lauro C. Reyes and
his witnesses Mr. Danilo Manalang and Ms. Rebecca Benitez-Cruz, that there is a probable cause to believe that
Violation of Section 56 P.D. No. 49 as amended by P.D. No. 1988 (otherwise known as the Decree on Protection of
Intellectual Property) has been committed and that there are good and sufficient reasons to believe that FGT Video
Network, Inc., Manuel Mendoza, Alfredo C. Ongyanco, Eric Apolonio, Susan Yang and Eduardo Yotoko are
responsible and have in control/possession at No. 4 Epifanio de los Santos corner Connecticut, Greenhills, San Juan,
Metro Manila (per attached sketch and list of MPAA member Company Titles) the following properties to wit:
(a) Pirated video tapes of the copyrighted motion pictures/ films the titles of which are mentioned in the attached
list;
(b) Posters, advertising leaflets, flyers, brochures, invoices, lists of titles being reproduced or retaped, journals,
ledgers, jon (sic) order slips, delivery slips and books of accounts bearing and/ or mentioning the pirated films with
titles (as per attached list), or otherwise used in the reproduction/repating business of the defendants;
(c)Television sets, video cassette recorders, rewinders, tape head cleaners, accessories, equipment and other
machines and paraphernalia or materials used or intended to be used in the unlawful sale, lease, distribution, or
possession for purpose of sale, lease, distribution, circulation or public exhibition of the above-mentioned pirated
video tapes which they are keeping and concealing in the premises above-described, which should be seized and
brought to the Undersigned.
You are hereby commanded to make an immediate search at any time in the day between 8:00 A.M. to 5:00 P.M. of
the premises above-described and forthwith seize and take possession of the above-enumerated personal properties,
and bring said properties to the under-signed immediately upon implementation to be dealt with as the law directs.
WITNESS MY HAND this 14th day of May 1987, at Pasig, Metro Manila. (pp. 30-31, Rollo, Emphasis supplied.)
At or about high noon of the same day, agents from the NBI, led by Lauro C. Reyes and Mamerto Espartero, with
the assistance of the personnel of the Videogram Regulatory Board headed by Elmer San Pascual, duly served
Search Warrant No. 45 on the operators or representatives of FGT. In the course of the search of the premises of
FGT, the NBI agents found and seized various video tapes of duly copyrighted motion pictures or films owned and
exclusively distributed by petitioners. Also seized were machines and equipment, television sets, paraphernalia,
materials, accessories, rewinders, tape head cleaners, statements of order, return slips, video prints, flyers,
production orders, and posters. Inventories of these seized articles were then prepared and copies thereof were
furnished Jess Ayson, production manager of FGT. On May 18, 1987, the NBI agents filed a return of the search
warrant with a motion to retain custody of the seized items (p. 32, Rollo).
Meanwhile, FGT filed an urgent motion for the immediate release of equipment and accessories “not covered” by the
search warrant, without prejudice to the filing of a motion to quash the said search warrant (p. 101, Rollo). It
argued that as a licensed video reproducer, FGT had the right to maintain possession of the seized reproduction
equipment and paraphernalia which are not contraband or illegal per se, but are rather “exclusively used and
intended to be used for reproduction” and not in the “sale, lease, distribution or possession for purposes of sale,
lease distribution, circulation or public exhibition of pirated video tapes”. (p. 102, Rollo.)
Petitioners opposed the motion, asserting that the seized articles were all lawfully taken. They explained that since
FGT was a videogram distributor and not a reproducer, “it may be logically concluded that such 634 VCRs,
accessories, etc.” were “used or intended to be used in the unlawful sale, lease, distribution or possession for
purposes of sale, lease, distribution, circulation or public exhibition of, at the very least, the 310 videocassette tapes
containing the copyrighted films/motion pictures.” They asserted that Search Warrant No. 45 was issued upon the
proper determination of probable cause and that, therefore, it is not for FGT “to second-guess the wisdom” of the
court’s directive to seize the questioned VCRs and accessories “as an inquiry thereon would involve evidentiary
matters which are better ventilated in the criminal prosecution proper”. (pp. 107-116, Rollo.)
Finding that FGT was a “registered and duly licensed distributor and in certain instances and under special
instructions and conditions . . . reproducer of videograms” and that, therefore, its right to possess and use the
seized equipment had been “placed in serious doubt”, the lower court resolved the doubt “against the Government
and in favor of a lawful business enterprise.” Applying the constitutional precept of presumption of innocence and
considering that the seized articles are not contraband, respondent court ruled that to allow the Government “to
keep possession of the equipment(s) and machines where there is no actual criminal charge” would amount to a
“confiscation in violation of the due process clause of the constitution, notwithstanding the filing by the Director of
the NBI of a letter to the Department of Justice recommending that the defendants be charged with violation of
Section 56 of P.D. No. 49, as amended by P.D. No. 1988.” (pp. 131-132, Rollo.)
Thus, in its order on May 29, 1987, the lower court granted FGT’s motion and ordered the immediate release and
return of the “television sets, video cassette recorders, rewinders, tape head cleaners, accessories, equipment and
other machines or paraphernalias, as reflected in the ‘Receipt for Properties Seized’ attached to the records of the
case beginning from page 84 to page 130, to the defendants, excluding video cassette tapes reflected in the
‘Receipts for Properties Seized’, beginning from page 132 to page 146 of the records.” Respondent court also
ordered the inventory of all articles returned with individual descriptions “to evidence their existence” copies of
which inventory should be furnished the NBI and the court (p. 132, Rollo).
Hence, the present recourse.
As prayed for by petitioners, on June 17, 1987, the Court issued a temporary restraining order enjoining respondents
from implementing the lower court’s order of May 29, 1987 upon a bond in the amount of P750,000.00 which
petitioners accordingly posted on June 19, 1987, (pp. 138-141, Rollo.)
The sole issue to be resolved is whether or not the lower court acted with grave abuse of discretion amounting to
lack of jurisdiction in ordering the immediate release and return of some of the items seized by virtue of the search
warrant.
Petitioners insist that the search warrant was issued upon due determination of probable cause. They argue that
FGT’s act of illegally reproducing copyrighted films had been clearly established by evidence on record and that
FGT’s principal ground in praying for the immediate release of the seized articles is a matter of defense which should
be ventilated at the trial of the case on the merits.
Private respondents, on the other hand, claim that the issuance of Search Warrant No. 45 is tainted with illegality as
no particular or specific acts or omissions constituting the offense charged had been alleged in the application for its
issuance.
The right to security against unreasonable searches and seizures is guaranteed under Section 2, Article III of the
1987 Constitution which provides:
Sec. 2. The right of the people to be secure in their persons, houses, papers and effects against unreasonable
searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant
of arrest shall issue except upon probable cause to be determined by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be
searched and the persons or things to be seized.
Thus, Sections 3 and 4 of Rule 126 of the Rules of Court provide for the requisites in the issuance of search
warrants:
SEC. 3. Requisites for issuing search warrant.—A search warrant shall not issue but upon probable cause in
connection with one specific offense to be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be
searched and the things to be seized.
SEC. 4. Examination of complainant; record.—The judge must, before issuing the warrant, personally examine in the
form of searching questions and answers, in writing and under oath the complainant and the witnesses he may
produce on facts personally known to them and attach to the record their sworn statements together with any
affidavits submitted.
In issuing a search warrant, the judge must strictly comply with the constitutional and statutory requirements. He
must determine the existence of probable cause by personally examining the applicant and his witnesses in the form
of searching questions (Silva vs. Presiding Judge, RTC of Negros Oriental, Br. XXXIII (203 SCRA 140 [1991]). The
search warrant must contain a specific description of the place to be searched and the articles sought to be seized
must be described with particularity (Pendon vs. Court of Appeals, 191 SCRA 429 [1990]).
Withal, measured by the aforegoing constitutional and legal provisions as well as the existing jurisprudence on the
matter, we find that Search Warrant No. 45 fails to satisfy the test of legality. More so because the Court has
previously decided a case dealing with virtually the same search warrant.
In 20th Century Fox Film Corp. vs. Court of Appeals (164 SCRA 655 [1988]), wherein therein petitioner is also one of
the petitioners herein, we upheld the legality of the order of the lower court lifting the search warrant issued under
circumstances similar to those obtaining in the case at bar.
A striking similarity between the case at bar and 20th Century Fox is the fact that Search Warrant No. 45, specifically
paragraph (c) thereof describing the articles to be seized, contains an almost identical description as the warrant
issued in the 20th Century Fox case, to wit:
(c) Television sets, Video Cassettes Recorders, rewinders, tape head cleaners, accessories, equipments and other
machines used or intended to be used in the unlawful reproduction, sale, rental/lease, distribution of the above-
mentioned video tapes which she is keeping and concealing in the premises above-described. (at p. 664.)
On the propriety of the seizure of the articles above-described, we held in said case:
Television sets, video cassette recorders, rewinders and tape cleaners are articles which can be found in a video
tape store engaged in the legitimate business of lending or renting out betamax tapes. In short, these articles and
appliances are generally connected with, or related to a legitimate business not necessarily involving piracy of
intellectual property or infringement of copyright laws. Hence, including these articles without specification and/or
particularity that they were really instruments in violating an Anti-Piracy law makes the search warrant too general
which could result in the confiscation of all items found in any video store. (at p. 665.)
The language used in paragraph (c) of Search Warrant No. 45 is thus too all-embracing as to include all the
paraphernalia of FGT in the operation of its business. As the search warrant is in the nature of a general one, it is
constitutionally objectionable (Corro vs. Lising, 137 SCRA 541 [1985]).
In consequence, respondent court was merely correcting its own erroneous conclusions in issuing Search Warrant
No. 45 when it ordered the return of the seized television sets and other paraphernalia specified in the motion filed
by FGT. This can be gleaned from its statement that “. . . the machines and equipment could have been used or
intended to be used in the illegal reproduction of tapes of the copyrighted motion pictures/films, yet, it cannot be
said with moral certainty that the machines or equipment(s) were used in violating the law by the mere fact that
pirated video tapes of the copyrighted motion pictures/films were reproduced. As already stated, FGT Video
Network, Inc. is a registered and duly licensed distributor and in certain instances and under special instructions . . .
reproducer of videograms, and as such, it has the right to keep in its possession, maintain and operate reproduction
equipment(s) and paraphernalia(s).” (pp. 131-132, Rollo.)
Far from being despotic or arbitrary, respondent judge must be commended for rectifying his error when he found
that his initial conclusions were inaccurate and erroneous, colliding as they did with the constitutional rights of
private respondent.
Much has been said in the media about piracy of films and videotapes and that violators of the law must be brought
to the courts but, as the Court said in Bagalihog vs. Fernandez (198 SCRA 614 [1991]), “[z]eal in the pursuit of
criminals cannot ennoble the use of arbitrary methods that the Constitution itself abhors.” (at p. 622.)
WHEREFORE, the petition is DISMISSED, the assailed order of May 29, 1987 AFFIRMED, and the temporary
restraining order issued on June 18, 1987, vacated and lifted.
SO ORDERED.
Feliciano (Chairman), Bidin, Davide, Jr. and Romero, JJ., concur.
Petition dismissed. Assailed order affirmed.
Note. — The law requires that the articles sought to be seized must be described with particularity (Pendon vs. Court
of Appeals, 191 SCRA 429).
——o0o——
20TH CENTURY FOX FILM CORPORATION, petitioner, vs. COURT OF APPEALS, EDUARDO M. BARRETO,
RAUL SAGULLO and FORTUNE LEDESMA, respondents
Nos. L-76649-51. August 19, 1988
Constitutional Law; Searches and Seizures; The constitutional right against illegal searches and seizures guaranteed
under Sec. 2, Art. III of the 1987 Constitution protects a citizen against unreasonable invasion of his privacy and
liberty as to his person, papers and effects. The privacy of a person must not be disturbed except in case of an
overriding social need.—This constitutional right protects a citizen against wanton and unreasonable invasion of his
privacy and liberty as to his person, papers and effects. We have explained in the case of People v. Burgos (144
SCRA 1) citing Villanueva v. Querubin (48 SCRA 345) why the right is so important: “ ‘It is deference to one’s
personality that lies at the core of this right, but it could be also looked upon as a recognition of a constitutionally
protected area, primarily one’s home, but not necessarily thereto confined. (Cf. Hoffa v. United States, 385 US 293
[1966]) What is sought to be guarded is a man’s prerogative to choose who is allowed entry to his residence. In that
haven of refuge, his individuality can assert itself not only in the choice of who shall be welcome but likewise in the
kind of objects he wants around him. There the state, however powerful, does not as such have access except under
the circumstances above noted, for in the traditional formulation, his house, however humble, is his castle. Thus is
outlawed any unwarranted intrusion by government, which is called upon to refrain from any invasion of his dwelling
and to respect the privacies of his life. (Cf. Schmerber v. California, 384 US 757 [1966], Brennan, J. and Boyd v.
United States, 116 630 [1886]. In the same vein, Landynski in his authoritative work (Search and Seizure and the
Supreme Court [1966]), could fitly characterize constitutional right as the embodiment of a ‘spiritual concept: the
belief that to value the privacy of home and person and to afford its constitutional protection against the long reach
of government is no less than to value human dignity, and that his privacy must not be disturbed except in case of
overriding social need, and then only under stringent procedural safeguards.’
Same; Same; Same; Search Warrants; Probable Cause; Probable cause for a valid search are such facts and
circumstances which would lead a reasonably prudent man to believe that an offense has been committed and the
objects sought in connection with the offense are in the place sought to be searched.—In the case of Burgos, Sr. v.
Chief of Staff, AFP (133 SCRA 800), we defined probable cause for a valid search “as such facts and circumstances
which would lead a reasonably discreet and prudent man to believe that an offense has been committed and that
the objects sought in connection with the offense are in the place sought to be searched.” This constitutional
provision also demands “no less than personal knowledge by the complainant or his witnesses of the facts upon
which the issuance of a search warrant may be justified” in order to convince the judge, not the individual making
the affidavit and seeking the issuance of the warrant, of the existence of a probable cause. (Alvarez v. Court of First
Instance, 64 Phil. 33; Burgos, Sr. v. Chief of Staff, AFP, supra).
Same; Same; Same; Personal Knowledge; Witnesses in the hearing for an application for search warrants must have
personal knowledge of the subject matter of their testimony as to the alleged commission of the offense.—The lower
court, therefore, lifted the three (3) questioned search warrants in the absence of probable cause that the private
respondents violated P.D. 49. As found out by the court, the NBI agents who acted as witnesses did not have
personal knowledge of the subject matter of their testimony which was the alleged commission of the offense by the
private respondents. Only the petitioner’s counsel who was also a witness during the application for the issuance of
the search warrants stated that he had personal knowledge that the confiscated tapes owned by the private
respondents were pirated tapes taken from master tapes belonging to the petitioner. However, the lower court did
not give much credence to his testimony in view of the fact that the master tapes of the allegedly pirated tapes were
not shown to the court during the application.
Same; Same; Same; General Warrants; The search wan-ant must contain a specific description of the articles to be
seized. General Warrants are constitutionally objectionable.—In the case of Burgos v. Chief of Staff, AFP supra, we
stated: xxx xxx xxx “Another factor which makes the search warrants under consideration constitutionally
objectionable is that they are in the nature of general warrants. The search warrants describe the articles sought to
be seized in this wise: “ ‘1] All printing equipment, paraphernalia, paper, ink, photo equipment, typewriters,
cabinets, tables communications/recording equipment, tape recorders, dictaphone and the like used and/or
connected in the printing of the ‘WE FORUM’ newspaper and any and all documents/communications, letters and
facsimile of prints related to the ‘WE FORUM’ newspaper. x x x x “In Stanford v. State of Texas (379 U.S. 476, 13 L
ed 2nd 431), the search warrant which authorized the search for ‘books, records, pamphlets, cards, receipts, lists,
memoranda, pictures, recordings and other written instruments concerning the Communist Parties of Texas, and the
operations of the Community Party in Texas,’ was declared void by the U.S. Supreme Court for being too general. In
like manner, directions to ‘seize any evidence in connection with the violation of SDC 13-3703 or otherwise’ have
been held too general, and that portion of a search warrant which authorized the seizure of any ‘paraphernalia which
could be used to violate Sec. 54-197 of the Connecticut General Statutes [the statute dealing with the crime of
conspiracy]’ was held to be a general warrant, and therefore invalid (68 Am. Jur. 2d., pp. 736-737). The description
of the articles sought to be seized under the search warrants in question cannot be characterized differently.” (at pp.
814-815)
Same; Same; Same; Same; A search warrant issued for alleged violation of the Anti-Film Piracy law which did not
describe with particularity the articles to be seized but instead listed articles and appliances generally connected with
the legitimate business of renting out betamax tapes, is in the nature of a general warrant.—Television sets, video
cassette recorders, rewinders and tape cleaners are articles which can be found in a video tape store engaged in the
legitimate business of lending or renting out betamax tapes. In short, these articles and appliances are generally
connected with, or related to a legitimate business not necessarily involving piracy of intellectual property or
infringement of copyright laws. Hence, including these articles without specification and/or particularity that they
were really instruments in violating an Anti-Piracy law makes the search warrant too general which could result in
the confiscation of all items found in any video store.
Same; Same; Same; PD No. 49, Anti-Film Piracy; The presentation of master tapes at the time of application for
search warrant is necessary for the validity of the search warrant.—The presentation of the master tapes of the
copyrighted films from which the pirated films were allegedly copied, was necessary for the validity of search
warrants against those who have in their possession the pirated films. The petitioner’s argument to the effect that
the presentation of the master tapes at the time of application may not be necessary as these would be merely
evidentiary in nature and not determinative of whether or not a probable cause exists to justify the issuance of the
search warrants is not meritorious. The court cannot presume that duplicate or copied tapes were necessarily
reproduced from master tapes that it owns.
Same; Criminal Law; Copyright Infringement; PD No. 49; The similarity or at least substantial similarity of the
purported pirated works to the copyright work is the essence of copyright infringement.—Hence, the applicant must
present to the court the copy-righted films to compare them with the purchased evidence of the video tapes
allegedly pirated to determine whether the latter is an unauthorized reproduction of the former. This linkage of the
copy-righted films to the pirated films must be established to satisfy the requirements of probable cause. Mere
allegations as to the existence of the copyrighted films cannot serve as basis for the issuance of a search warrant.
PETITION to review the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
 Siguion Reyna, Montecillo & Ongsiako Law Office for petitioner.
B.C. Salazar & Associates for respondents.
GUTIERREZ, JR., J.:
The petitioner questions the application of the constitutional provision against illegal searches and seizures to raids
conducted in connection with the government’s anti-film piracy compaign. The main issue hinges on whether or not
the judge properly lifted the search warrants he issued earlier upon the application of the National Bureau of
Investigation on the basis of the complaint filed by the petitioner.
In a letter-complaint dated August 26, 1985, petitioner 20th Century Fox Film Corporation through counsel sought
the National Bureau of Investigation’s (NBI) assistance in the conduct of searches and seizures in connection with
the latter’s anti-film piracy campaign. Specifically, the letter-complaint alleged that certain videotape outlets all over
Metro Manila are engaged in the unauthorized sale and renting out of copy-righted films in videotape form which
constitute a flagrant violation of Presidential Decree No. 49 (otherwise known as the Decree on the Protection of
Intellectual Property).
Acting on the letter-complaint, the NBI conducted surveillance and investigation of the outlets pinpointed by the
petitioner and subsequently filed three (3) applications for search warrants against the video outlets owned by the
private respondents. The applications were consolidated and heard by the Regional Trial Court of Makati, Branch
132.
On September 4, 1985, the lower court issued the desired search warrants.
Armed with the search warrants, the NBI accompanied by the petitioner’s agents, raided the video outlets and seized
the items described therein. An inventory of the items seized was made and left with the private respondents.
Acting on a motion to lift search warrants and release seized properties filed by the private respondents, the lower
court issued an order dated October 8, 1985, lifting the three (3) search warrants issued earlier against the private
respondents by the court. The dispositive portion of the order reads:
“WHEREFORE, the Court hereby orders that Search Warrants Nos. SW-85-024; issued against Eduardo M. Barreto of
the Junction Video, etc., Parañaque, Metro Manila; SW No. 85-025, issued against Raul M. Sagullo of South Video
Bug Center, Inc., etc., also of No. 53-55 Pres. Avenue BF Homes, Parañaque, Metro Manila; and SW No. 85-026,
issued against Fortune A. Ledesma of Sonix Video Services of San Antonio Plaza, Forbes Park, Makati, Metro Manila,
be lifted.
“Consequently, the articles listed in the returns of the three search warrants which could not be a basis of any
criminal prosecution, now in the possession of the National Bureau of Investigation which under the law must be
delivered to this Court, but which the NBI failed to do, are hereby ordered to be returned to their owners through
their lawyer, Atty. Benito Salazar or his agents or representatives, against proper receipt, to be forwarded to this
Court for record purposes, as proof that said properties have been returned to the possession of the rightful
owners.” (p. 34, Rollo)
The lower court denied a motion for reconsideration filed by the petitioner in its order dated January 2, 1986.
The petitioner filed a petition for certiorari with the Court of Appeals to annul the October 8, 1985 and January 2,
1986 orders of the lower court. The petition was dismissed.
Hence, this petition.
The main issue hinges on the meaning of “probable cause” within the context of the constitutional provision against
illegal searches and seizures (Section 3, Article IV, 1973 Constitution, now, Section 2, Article III, 1987 Constitution.
The petitioner maintains that the lower court issued the questioned search warrants after finding the existence of a
probable cause justifying their issuance. According to the petitioner, the lower court arrived at this conclusion on the
basis of the depositions of applicant NBI’s two witnesses which were taken through searching questions and answers
by the lower court.
Section 2, Article III of the present Constitution which substantially reproduces Section 3, Article IV of the 1973
Constitution on illegal searches and seizures provides:
“The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches
and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest
shall issue except upon probable cause to be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be
searched and the persons or things to be seized.”
This constitutional right protects a citizen against wanton and unreasonable invasion of his privacy and liberty as to
his person, papers and effects. We have explained in the case of People v. Burgos (144 SCRA 1) citing Villanueva v.
Querubin (48 SCRA 345) why the right is so important:
“ ‘It is deference to one’s personality that lies at the core of this right, but it could be also looked upon as a
recognition of a constitutionally protected area, primarily one’s home, but not necessarily thereto confined. (Cf.
Hoffa v. United States, 385 US 293 [1966]) What is sought to be guarded is a man’s prerogative to choose who is
allowed entry to his residence. In that haven of refuge, his individuality can assert itself not only in the choice of
who shall be welcome but likewise in the kind of objects he wants around him. There the state, however powerful,
does not as such have access except under the circumstances above noted, for in the traditional formulation, his
house, however humble, is his castle. Thus is outlawed any unwarranted intrusion by government, which is called
upon to refrain from any invasion of his dwelling and to respect the privacies of his life. (Cf. Schmerber v. California,
384 US 757 [1966], Brennan, J. and Boyd v. United States, 116 630 [1886]). In the same vein, Landynski in his
authoritative work (Search and Seizure and the Supreme Court [1966]), could fitly characterize constitutional right as
the embodiment of a ‘spiritual concept: the belief that to value the privacy of home and person and to afford its
constitutional protection against the long reach of government is no less than to value human dignity, and that his
privacy must not be disturbed except in case of overriding social need, and then only under stringent procedural
safeguards.’ (ibid, p. 74).’ ”
The government’s right to issue search warrants against a citizen’s papers and effects is circumscribed by the
requirements mandated in the searches and seizures provision of the Constitution.
In the case of Burgos, Sr. v. Chief of Staff, AFP (133 SCRA 800), we defined probable cause for a valid search “as
such facts and circumstances which would lead a reasonably discreet and prudent man to believe that an offense
has been committed and that the objects sought in connection with the offense are in the place sought to be
searched.” This constitutional provision also demands “no less than personal knowledge by the complainant or his
witnesses of the facts upon which the issuance of a search warrant may be justified” in order to convince the judge,
not the individual making the affidavit and seeking the issuance of the warrant, of the existence of a probable cause.
(Alvarez v. Court of First Instance, 64 Phil. 33; Burgos, Sr. v. Chief of Staff, AFP, supra).
In the instant case, the lower court lifted the three questioned search warrants against the private respondents on
the ground that it acted on the application for the issuance of the said search warrants and granted it on the
misrepresentations of applicant NBI and its witnesses that infringement of copyright or a piracy of a particular film
have been committed. Thus the lower court stated in its questioned order dated January 2, 1986:
“According to the movant, all three witnesses during the proceedings in the application for the three search warrants
testified of their own personal knowledge. Yet, Atty. Albino Reyes of the NBI stated that the counsel or
representative of the Twentieth Century Fox Corporation will testify on the video cassettes that were pirated, so that
he did not have personal knowledge of the alleged piracy. The witness Bacani also said that the video cassettes
were pirated without stating the manner it was pirated and that it was Atty. Domingo that has knowledge of that
fact.
“On the part of Atty. Domingo, he said that the re-taping of the allegedly pirated tapes was from master tapes
allegedly belonging to the Twentieth Century Fox, because, according to him, it is of his personal knowledge.
“At the hearing of the Motion for Reconsideration, Senior NBI Agent Atty. Albino Reyes testified that when the
complaint for infringement was brought to the NBI, the master tapes of the allegedly pirated tapes were shown to
him and he made comparisons of the tapes with those purchased by their man Bacani. Why the master tapes or at
least the film reels of the allegedly pirated tapes were not shown to the Court during the application gives some
misgivings as to the truth of that bare statement of the NBI agent on the witness stand.
“Again as the application and search proceedings is a prelude to the filing of criminal cases under PD 49, the
copyright infringement law, and although what is required for the issuance thereof is merely the presence of
probable cause, that probable cause must be satisfactory to the Court, for it is a time-honored precept that
proceedings to put a man to task as an offender under our laws should be interpreted in strictissimi juris against the
government and liberally in favor of the alleged offender.
xxx xxx xxx
“This doctrine has never been overturned, and as a matter of fact it had been enshrined in the Bill of Rights in our
1973 Constitution.
“So that lacking in persuasive effect, the allegation that master tapes were viewed by the NBI and were compared to
the purchased and seized video tapes from the respondents’ establishments, it should be dismissed as not supported
by competent evidence and for that matter the probable cause hovers in that grey debatable twilight zone between
black and white resolvable in favor of respondents herein.
“But the glaring fact is that ‘Cocoon,’ the first video tape mentioned in the search warrant, was not even duly
registered or copy-righted in the Philippines. (Annex C of Opposition p. 152 record). So, that lacking in the requisite
presentation to the Court of an alleged master tape for purposes of comparison with the purchased evidence of the
video tapes allegedly pirated and those seized from respondents, there was no way to determine whether there
really was piracy, or copying of the film of the complainant Twentieth Century Fox.” (pp. 37-39, Rollo)
xxx xxx xxx
The lower court, therefore, lifted the three (3) questioned search warrants in the absence of probable cause that the
private respondents violated P.D. 49. As found out by the court, the NBI agents who acted as witnesses did not have
personal knowledge of the subject matter of their testimony which was the alleged commission of the offense by the
private respondents. Only the petitioner’s counsel who was also a witness during the application for the issuance of
the search warrants stated that he had personal knowledge that the confiscated tapes owned by the private
respondents were pirated tapes taken from master tapes belonging to the petitioner. However, the lower court did
not give much credence to his testimony in view of the fact that the master tapes of the allegedly pirated tapes were
not shown to the court during the application.
All these factors were taken into consideration by the lower court when it lifted the three questioned search
warrants. There is no truth, therefore, to the petitioner’s allegation that the lower court based its January 2, 1986
order only “on the fact that the original or master copies of the copyrighted films were not presented during the
application for search warrants, thus leading it to conclude that it had been “misled by the applicant and his
witnesses.” (p. 17, Rollo)
The presentation of the master tapes of the copyrighted films from which the pirated films were allegedly copied,
was necessary for the validity of search warrants against those who have in their possession the pirated films. The
petitioner’s argument to the effect that the presentation of the master tapes at the time of application may not be
necessary as these would be merely evidentiary in nature and not determinative of whether or not a probable cause
exists to justify the issuance of the search warrants is not meritorious. The court cannot presume that duplicate or
copied tapes were necessarily reproduced from master tapes that it owns.
The application for search warrants was directed against video tape outlets which allegedly were engaged in the un-
authorized sale and renting out of copyrighted films belonging to the petitioner pursuant to P.D. 49.
The essence of a copyright infringement is the similarity or at least substantial similarity of the purported pirated
works to the copyrighted work. Hence, the applicant must present to the court the copyrighted films to compare
them with the purchased evidence of the video tapes allegedly pirated to determine whether the latter is an
unauthorized reproduction of the former. This linkage of the copyrighted films to the pirated films must be
established to satisfy the requirements of probable cause. Mere allegations as to the existence of the copyrighted
films cannot serve as basis for the issuance of a search warrant.
Furthermore, we note that the search warrants described the articles sought to be seized as follows:
xxx xxx xxx
xxx xxx xxx
“c) Television sets, Video Cassettes Recorders, rewinders, tape head cleaners, accessories, equipments and other
machines used or intended to be used in the unlawful reproduction, sale, rental/lease, distribution of the above-
mentioned video tapes which she is keeping and concealing in the premises above-described.” (p. 26, Rollo)
In the case of Burgos v. Chief of Staff, AFP supra, we stated:
xxx xxx xxx
“Another factor which makes the search warrants under consideration constitutionally objectionable is that they are
in the nature of general warrants. The search warrants describe the articles sought to be seized in this wise:
“ ‘1] All printing equipment, paraphernalia, paper, ink, photo equipment, typewriters, cabinets, tables
communications/recording equipment, tape recorders, dictaphone and the like used and/or connected in the printing
of the ‘WE FORUM’ newspaper and any and all document/communications, letters and facsimile of prints related to
the ‘WE FORUM’ newspaper.
“ ‘2] Subversive documents, pamphlets, leaflets, books, and other publications to promote the objectives and
purposes of the subversive organizations known as Movement for Free Philippines, Light-a-Fire Movement and April
6 Movement; and
“ ‘3] Motor vehicles used in the distribution/circulation of the ‘WE FORUM’ and other subversive materials and
propaganda, more particularly,
“1] Toyota-Corolla, colored yellow with Plate No. NKA 892;
“ ‘2] DATSUN pick-up colored white with Plate No. NKV 969;
“ ‘3] A delivery truck with Plate No. NBS 542;
“ ‘4] TOYOTA-TAMARAW, colored white with Plate No. PBP 665; and,
“ ‘5] TOYOTA Hi-Lux, pick-up truck with Plate No. NGV 472 with marking ‘Bagong Silang.’
“In Stanford v. State of Texas (379 U.S. 476, 13 L ed 2nd 431), the search warrant which authorized the search for
‘books, records, pamphlets, cards, receipts, lists, memoranda, pictures, recordings and other written instruments
concerning the Communist Parties of Texas, and the operations of the Community Party in Texas,’ was declared void
by the U.S. Supreme Court for being too general. In like manner, directions to ‘seize any evidence in connection with
the violation of SDC 13-3703 or otherwise’ have been held too general, and that portion of a search warrant which
authorized the seizure of any ‘paraphernalia which could be used to violate Sec. 54-197 of the Connecticut General
Statutes [the statute dealing with the crime of conspiracy]’ was held to be a general warrant, and therefore invalid
(68 Am. Jur. 2d., pp. 736-737). The description of the articles sought to be seized under the search warrants in
question cannot be characterized differently.” (at pp. 814-815)
Undoubtedly, a similar conclusion can be deduced from the description of the articles sought to be confiscated under
the questioned search warrants.
Television sets, video cassette recorders, rewinders and tape cleaners are articles which can be found in a video
tape store engaged in the legitimate business of lending or renting out betamax tapes. In short, these articles and
appliances are generally connected with, or related to a legitimate business not necessarily involving piracy of
intellectual property or infringement of copyright laws. Hence, including these articles without specification and/or
particularity that they were really instruments in violating an Anti-Piracy law makes the search warrant too general
which could result in the confiscation of all items found in any video store. In fact, this actually happened in the
instant case. Thus, the lower court, in its questioned order dated October 8, 1985 said:
“Although the applications and warrants themselves covered certain articles of property usually found in a video
store, the Court believes that the search party should have confined themselves to articles that are according to
them, evidence constitutive of infringement of copyright laws or the piracy of intellectual property, but not to other
articles that are usually connected with, or related to, a legitimate business, not involving piracy of intellectual
property, or infringement of copyright laws. So that a television set, a rewinder, and a whiteboard listing Betamax
tapes, video cassette cleaners video cassette recorders as reflected in the Returns of Search Warrants, are items of
legitimate business engaged in the video tape industry, and which could not be the subject of seizure. The applicant
and his agents therefore exceeded their authority in seizing perfectly legitimate personal property usually found in a
video cassette store or business establishment.” (p. 33, Rollo)
All in all, we find no grave abuse of discretion on the part of the lower court when it lifted the search warrants it
earlier issued against the private respondents. We agree with the appellate court’s findings to the effect that:
“An assiduous examination of the assailed orders reveal that the main ground upon which the respondent Court
anchored said orders was its subsequent findings that it was misled by the applicant (NBI) and its witnesses ‘that
infringement of copyright or a piracy of a particular film have been committed when it issued the questioned
warrants.’ Stated differently, the respondent Court merely corrected its erroneous findings as to the existence of
probable cause and declared the search and seizure to be unreasonable. Certainly, such action is within the power
and authority of the respondent Court to perform, provided that it is not exercised in an oppressive or arbitrary
manner. Indeed, the order of the respondent Court declaring the existence of probable cause is not final and does
not constitute res judicata.
“A careful review of the record of the case shows that the respondent Court did not commit a grave abuse of
discretion when it issued the questioned orders. Grave abuse of discretion ‘implies such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction, or, in other words, where the power is exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to
amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.’ But far from being despotic or arbitrary, the assailed orders were motivated by a noble desire
of rectifying an error, much so when the erroneous findings collided with the constitutional rights of the private
respondents. In fact, the petitioner did not even contest the righteousness and legality of the questioned orders but
instead concentrated on the alleged denial of due process of law.” (pp. 44-45, Rollo)
The proliferation of pirated tapes of films not only deprives the government of much needed revenues but is also an
indication of the widespread breakdown of national order and discipline. Courts should not impose any unnecessary
roadblocks in the way of the anti-film piracy campaign. However, the campaign cannot ignore or violate
constitutional safeguards. To say that the problem of pirated films can be solved only by the use of unconstitutional
shortcuts is to denigrate the long history and experience behind the searches and seizures clause of the Bill of
Rights. The trial court did not commit reversible error.
WHEREFORE, the instant petition is DISMISSED. The questioned decision and resolution of the Court of Appeals are
AFFIRMED.
SO ORDERED.
Fernan (C.J.), Feliciano, Bidin and Cortés, JJ., concur.
Petition dismissed. Decision and resolution affirmed.
Note. — Issuance of search warrant is illegal for Judge’s failure to conform with essential requisites for taking
deposition of complainant and his witnesses to determine existence or non-existence of probable cause, and to
attack the depositions in the record. (Mata vs. Bayona, 128 SCRA 388.)
——o0o——
 1. United States Court of Appeals, Ninth
Circuit.
VMG SALSOUL, LLC, a Delaware limited liability company, Plaintiff-Appellant, v. MADONNA LOUISE
CICCONE, professionally known as Madonna, an individual; SHEP PETTIBONE, an individual; WB MUSIC
CORPORATION, a Delaware corporation; WEBO GIRL PUBLISHING, INC., a California corporation;
LEXOR MUSIC, INC., a New York corporation; WARNER MUSIC GROUP, a Delaware corporation;
WARNER BROS. RECORDS, INC., a Delaware corporation, Defendants-Appellees.
1. Nos. 13-57104
2. Decided: June 02, 2016
Before: Barry G. Silverman and Susan P. Graber, Circuit Judges, and David A. Ezra,* District Judge.COUNSEL, Robert
S. Besser (argued) and Christopher Chapin, Law Offices of Robert S. Besser, Santa Monica, California, for Plaintiff-
Appellant. Alexander Kaplan (argued), Proskauer Rose LLP, New York, New York; Richard S. Busch (argued) and
Paul H. Duvall, King & Ballow, San Diego, California; and Sandra A. Crawshaw-Sparks and Susan L. Gutierrez,
Proskauer Rose LLP, Los Angeles, California, for Defendants-Appellees.
OPINION
Dissent by Judge Silverman
SUMMARY **
Copyright
The panel affirmed the district court's summary judgment in favor of the defendants and vacated an award of
attorney's fees on a claim that in the Madonna song Vogue, a modified version of a horn segment allegedly copied
from a song known as Love Break violated the plaintiff's copyrights to Love Break.
Affirming the district court's summary judgment, the panel held that any copying that occurred was “de mimimis”
and not an infringement of either the composition or the sound recording of Love Break. The panel agreed with the
district court that, as a matter of law, a general audience would not recognize the brief snippet in Vogue as
originating from Love Break. Disagreeing with the Sixth Circuit, the panel held that Congress did not eliminate the de
minimis exception to claims alleging infringement of a sound recording in 17 U.S.C. § 114(b).
The panel held that the district court abused its discretion in granting attorney's fees to the defendants under 17
U.S.C. § 505. The panel held that a claim premised on a legal theory adopted by the only circuit court to have
addressed the issue is, as a matter of law, objectively reasonable.
Dissenting, Judge Silverman wrote that the court should follow the Sixth Circuit and hold that the use of an identical
copy of a portion of a copyrighted fixed sound recording is an infringement.
GRABER, Circuit Judge:
In the early 1990s, pop star Madonna Louise Ciccone, commonly known by her first name only, released the song
Vogue to great commercial success. In this copyright infringement action, Plaintiff VMG Salsoul, LLC, alleges that the
producer of Vogue, Shep Pettibone, copied a 0.23-second segment of horns from an earlier song, known as Love
Break, and used a modified version of that snippet when recording Vogue. Plaintiff asserts that Defendants
Madonna, Pettibone, and others thereby violated Plaintiff's copyrights to Love Break. The district court applied the
longstanding legal rule that “de minimis” copying does not constitute infringement and held that, even if Plaintiff
proved its allegations of actual copying, the claim failed because the copying (if it occurred) was trivial. The district
court granted summary judgment to Defendants and awarded them attorney's fees under 17 U.S.C. § 505. Plaintiff
timely appeals.
Reviewing the summary judgment de novo, Alcantar v. Hobart Serv., 800 F.3d 1047, 1051 (9th Cir. 2015), we agree
with the district court that, as a matter of law, a general audience would not recognize the brief snippet in Vogue as
originating from Love Break. We also reject Plaintiff's argument that Congress eliminated the “de minimis” exception
to claims alleging infringement of a sound recording. We recognize that the Sixth Circuit held to the contrary in
Bridgeport Music, Inc. v. Dimension Films, 410 F.3d 792 (6th Cir. 2005), but—like the leading copyright treatise and
several district courts—we find Bridgeport's reasoning unpersuasive. We hold that the “de minimis” exception applies
to infringement actions concerning copyrighted sound recordings, just as it applies to all other copyright
infringement actions. Accordingly, we affirm the summary judgment in favor of Defendants.
But we conclude that the district court abused its discretion in granting attorney's fees to Defendants under 17
U.S.C. § 505. See Seltzer v. Green Day, Inc., 725 F.3d 1170, 1180 (9th Cir. 2013) (holding that we review for abuse
of discretion the district court's award of attorney's fees under § 505). A claim premised on a legal theory adopted
by the only circuit court to have addressed the issue is, as a matter of law, objectively reasonable. The district
court's conclusion to the contrary constitutes legal error. We therefore vacate the award of fees and remand for
reconsideration.
FACTUAL AND PROCEDURAL HISTORY
Because this case comes to us on appeal from a grant of summary judgment to Defendants, we recount the facts in
the light most favorable to Plaintiff. Alcantar, 800 F.3d at 1051.
In the early 1980s, Pettibone recorded the song Ooh I Love It (Love Break), which we refer to as Love Break. In
1990, Madonna and Pettibone recorded the song Vogue, which would become a mega-hit dance song after its
release on Madonna's albums. Plaintiff alleges that, when recording Vogue, Pettibone “sampled” certain sounds from
the recording of Love Break and added those sounds to Vogue. “Sampling” in this context means the actual physical
copying of sounds from an existing recording for use in a new recording, even if accomplished with slight
modifications such as changes to pitch or tempo. See Newton v. Diamond, 388 F.3d 1189, 1192 (9th Cir. 2004)
(discussing the term “sampling”).
Plaintiff asserts that it holds copyrights to the composition and to the sound recording of Love Break. Plaintiff argues
that, because Vogue contains sampled material from Love Break, Defendants have violated both copyrights.
Although Plaintiff originally asserted improper sampling of strings, vocals, congas, “vibraslap,” and horns from Love
Break as well as another song, Plaintiff now asserts a sole theory of infringement: When creating two commercial
versions of Vogue, Pettibone sampled a “horn hit” 1 from Love Break, violating Plaintiff's copyrights to both the
composition and the sound recording of Love Break.
The horn hit appears in Love Break in two forms. A “single” horn hit in Love Break consists of a quarter-note chord
comprised of four notes—E-flat, A, D, and F—in the key of B-flat. The single horn hit lasts for 0.23 seconds. A
“double” horn hit in Love Break consists of an eighth-note chord of those same notes, followed immediately by a
quarter-note chord of the same notes. Plaintiff's expert identified the instruments as “predominantly” trombones and
trumpets.
The alleged source of the sampling is the “instrumental” version of Love Break, which lasts 7 minutes and 46
seconds. The single horn hit occurs 27 times, and the double horn hit occurs 23 times. The horn hits occur at
intervals of approximately 2 to 4 seconds in two different segments: between 3:11 and 4:38, and from 7:01 to the
end, at 7:46. The general pattern is single-double repeated, double-single repeated, single-single-double repeated,
and double-single repeated. Many other instruments are playing at the same time as the horns.
The horn hit in Vogue appears in the same two forms as in Love Break: single and double. A “single” horn hit in
Vogue consists of a quarter-note chord comprised of four notes—E, A-sharp, D-sharp, and F-sharp—in the key of B-
natural. A double horn hit in Vogue consists of an eighth-note chord of those same notes, followed immediately by a
quarter-note chord of the same notes.
The two commercial versions of Vogue that Plaintiff challenges are known as the “radio edit” version and the
“compilation” version. The radio edit version of Vogue lasts 4 minutes and 53 seconds. The single horn hit occurs
once, the double horn hit occurs three times, and a “breakdown” version of the horn hit occurs once.They occur at
0:56, 1:02, 3:41, 4:05, and 4:18. The pattern is single-double-double-double-breakdown. As with Love Break, many
other instruments are playing at the same time as the horns.
The compilation version of Vogue lasts 5 minutes and 17 seconds. The single horn hit occurs once, and the double
horn hit occurs five times. They occur at 1:14, 1:20, 3:59, 4:24, 4:40, and 4:57. The pattern is single-double-double-
double-double-double. Again, many other instruments are playing as well.
One of Plaintiff's experts transcribed the composition of the horn hits in the two songs as follows. Love Break's single
horn hit:
Tabular or graphical material not displayable at this time.
Vogue's single horn hit:
Tabular or graphical material not displayable at this time.
Love Break's double horn hit:
Tabular or graphical material not displayable at this time.
Vogue's double horn hit:
Tabular or graphical material not displayable at this time.
In a written order, the district court granted summary judgment to Defendants on two alternative grounds. First,
neither the composition nor the sound recording of the horn hit was “original” for purposes of copyright law. Second,
the court ruled that, even if the horn hit was original, any sampling of the horn hit was “de minimis or trivial.” In a
separate order, the district court awarded attorney's fees to Defendants under 17 U.S.C. § 505. Plaintiff timely
appeals both orders.
DISCUSSION
Plaintiff has submitted evidence of actual copying. In particular, Tony Shimkin has sworn that he, as Pettibone's
personal assistant, helped with the creation of Vogue and that, in Shimkin's presence, Pettibone directed an engineer
to introduce sounds from Love Break into the recording of Vogue. Additionally, Plaintiff submitted reports from music
experts who concluded that the horn hits in Vogue were sampled from Love Break. Defendants do not concede that
sampling occurred, and they have introduced much evidence to the contrary. But for purposes of summary
judgment, Plaintiff has introduced sufficient evidence (including direct evidence) to create a genuine issue of
material fact as to whether copying in fact occurred. Taking the facts in the light most favorable to Plaintiff, Plaintiff
has demonstrated actual copying. Accordingly, our analysis proceeds to the next step.
Our leading authority on actual copying is Newton, 388 F.3d 1189. We explained in Newton that proof of actual
copying is insufficient to establish copyright infringement:
For an unauthorized use of a copyrighted work to be actionable, the use must be significant enough to constitute
infringement. See Ringgold v. Black Entm't Television, Inc., 126 F.3d 70, 74–75 (2d Cir. 1997). This means that even
where the fact of copying is conceded, no legal consequences will follow from that fact unless the copying is
substantial. See Laureyssens v. Idea Group, Inc., 964 F.2d 131, 140 (2d Cir. 1992); 4 Melville B. Nimmer & David
Nimmer, Nimmer on Copyright § 13.03[A], at 13-30.2. The principle that trivial copying does not constitute
actionable infringement has long been a part of copyright law. Indeed, as [a judge] observed over 80 years ago:
“Even where there is some copying, that fact is not conclusive of infringement. Some copying is permitted. In
addition to copying, it must be shown that this has been done to an unfair extent.” West Publ'g Co. v. Edward
Thompson Co., 169 F. 833, 861 (E.D.N.Y. 1909). This principle reflects the legal maxim, de minimis non curatlex
(often rendered as, “the law does not concern itself with trifles”). See Ringgold, 126 F.3d at 74–75.
Newton, 388 F.3d at 1192–93. In other words, to establish its infringement claim, Plaintiff must show that the
copying was greater than de minimis.
Plaintiff's claim encompasses two distinct alleged infringements: infringement of the copyright to the composition of
Love Break and infringement of the copyright to the sound recording of Love Break. Compare 17 U.S.C. § 102(a)(2)
(protecting “musical works”) with id. § 102(a)(7) (protecting “sound recordings”); see Erickson v. Blake, 839 F.
Supp. 2d 1132, 1135 n.3 (D. Or. 2012) (“Sound recordings and musical compositions are separate works with their
own distinct copyrights.”); see also Newton, 388 F.3d at 1193–94 (noting the distinction). We squarely held in
Newton, 388 F.3d at 1193, that the de minimis exception applies to claims of infringement of a copyrighted
composition. But it is an open question in this circuit whether the exception applies to claims of infringement of a
copyrighted sound recording.
Below, we address (A) whether the alleged copying of the composition or the sound recording was de minimis, (B)
whether the de minimis exception applies to alleged infringement of copyrighted sound recordings, and (C) whether
the district court abused its discretion in awarding attorney's fees to Defendants under 17 U.S.C. § 505.
A. Application of the De Minimis Exception
A “use is de minimis only if the average audience would not recognize the appropriation.” Newton, 388 F.3d at 1193;
see id. at 1196 (affirming the grant of summary judgment because “an average audience would not discern
Newton's hand as a composer ․ from Beastie Boys' use of the sample”); Fisher v. Dees, 794 F.2d 432, 435 n.2 (9th
Cir. 1986) (“As a rule, a taking is considered de minimis only if it is so meager and fragmentary that the average
audience would not recognize the appropriation.”); see also Dymow v. Bolton, 11 F.2d 690, 692 (2d Cir. 1926)
(“[C]opying which is infringement must be something which ordinary observations would cause to be recognized as
having been taken from the work of another.” (internal quotation marks omitted)). Accordingly, we must determine
whether a reasonable juror could conclude that the average audience would recognize the appropriation. We will
consider the composition and the sound recording copyrights in turn.
1. Alleged Infringement of the Composition Copyright
When considering an infringement claim of a copyrighted musical composition, what matters is not how the
musicians actually played the notes but, rather, a “generic rendition of the composition.” Newton, 388 F.3d at 1194;
see id. at 1193 (holding that, when considering infringement of the composition copyright, one “must remove from
consideration all the elements unique to [the musician's] performance”). That is, we must compare the written
compositions of the two pieces.
Viewing the evidence in the light most favorable to Plaintiff, Defendants copied two distinct passages in the horn
part of the score for Love Break. First, Defendants copied the quarter-note single horn hit. But no additional part of
the score concerning the single horn hit is the same, because the single horn hit appears at a different place in the
measure. In Love Break, the notes for the measure are: half-note rest, quarter-note rest, single horn hit. In Vogue,
however, the notes for the measure are: half-note rest, eighth-note rest, single horn hit, eighth-note rest. Second,
Defendants copied a full measure that contains the double horn hit. In both songs, the notes for the measure are:
half-note rest, eighth-note rest, eighth-note horn hit, quarter-note horn hit. In sum, Defendants copied, at most, a
quarter-note single horn hit and a full measure containing rests and a double horn hit.
After listening to the recordings, we conclude that a reasonable jury could not conclude that an average audience
would recognize the appropriation of the composition. Our decision in Newton is instructive. That case involved a
copyrighted composition of “a piece for flute and voice.” Newton, 388 F.3d at 1191. The defendants used a six-
second sample that “consist[ed] of three notes, C—D flat—C, sung over a background C note played on the flute.”
Id. The composition also “require[d] overblowing the background C note that is played on the flute.” Id. The
defendants repeated a six-second sample “throughout [the song], so that it appears over forty times in various
renditions of the song.” Id. at 1192. After listening to the recordings, we affirmed the grant of summary judgment
because “an average audience would not discern [the composer's] hand as a composer.” Id. at 1196.
The snippets of the composition that were (as we must assume) taken here are much smaller than the sample at
issue in Newton. The copied elements from the Love Break composition are very short, much shorter than the six-
second sample in Newton. The single horn hit lasts less than a quarter-second, and the double horn hit lasts—even
counting the rests at the beginning of the measure—less than a second. Similarly, the horn hits appear only five or
six times in Vogue, rather than the dozens of times that the sampled material in Newton occurred in the challenged
song in that case. Moreover, unlike in Newton, in which the challenged song copied the entire composition of the
original work for the given temporal segment, the sampling at issue here involves only one instrument group out of
many. As noted above, listening to the audio recordings confirms what the foregoing analysis of the composition
strongly suggests: A reasonable jury could not conclude that an average audience would recognize an appropriation
of the Love Break composition.
2. Alleged Infringement of the Sound Recording Copyright
When considering a claimed infringement of a copyrighted sound recording, what matters is how the musicians
played the notes, that is, how their rendition distinguishes the recording from a generic rendition of the same
composition. See Newton, 388 F.3d at 1193 (describing the protected elements of a copyrighted sound recording as
“the elements unique to [the musician's] performance”). Viewing the evidence in the light most favorable to Plaintiff,
by accepting its experts' reports, Pettibone sampled one single horn hit, which occurred at 3:35 in Love Break.
Pettibone then used that sampled single horn hit to create the double horn hit used in Vogue.
The horn hit itself was not copied precisely. According to Plaintiff's expert, the chord “was modified by transposing it
upward, cleaning up the attack slightly in order to make it punchier [by truncating the horn hit] and overlaying it
with other sounds and effects. One such effect mimicked the reverse cymbal crash. ․ The reverb/delay ‘tail’ ․ was
prolonged and heightened.” Moreover, as with the composition, the horn hits are not isolated sounds. Many other
instruments are playing at the same time in both Love Break and Vogue.
In sum, viewing the evidence in the light most favorable to Plaintiff, Pettibone copied one quarter-note of a four-
note chord, lasting 0.23 seconds; he isolated the horns by filtering out the other instruments playing at the same
time; he transposed it to a different key; he truncated it; and he added effects and other sounds to the chord
itself.8 For the double horn hit, he used the same process, except that he duplicated the single horn hit and
shortened one of the duplicates to create the eighth-note chord from the quarter-note chord. Finally, he overlaid the
resulting horn hits with sounds from many other instruments to create the song Vogue.
After listening to the audio recordings submitted by the parties, we conclude that a reasonable juror could not
conclude that an average audience would recognize the appropriation of the horn hit. That common-sense
conclusion is borne out by dry analysis. The horn hit is very short—less than a second. The horn hit occurs only a
few times in Vogue. Without careful attention, the horn hits are easy to miss. Moreover, the horn hits in Vogue do
not sound identical to the horn hits from Love Break. As noted above, assuming that the sampling occurred,
Pettibone truncated the horn hit, transposed it to a different key, and added other sounds and effects to the horn hit
itself. The horn hit then was added to Vogue along with many other instrument tracks. Even if one grants the
dubious proposition that a listener recognized some similarities between the horn hits in the two songs, it is hard to
imagine that he or she would conclude that sampling had occurred.
A quirk in the procedural history of this case is illuminating on this point. Plaintiff's primary expert originally
misidentified the source of the sampled double horn hit. In his original report, the expert concluded that both a
single horn hit and a double horn hit were sampled from Love Break. The parties later discovered the original tracks
to Vogue and were able to listen to the horn hits without interference from the many other instruments. After
listening to those tracks, the expert decided that he had erred in opining that a double horn hit was sampled. He
concluded instead that only a single horn hit was sampled, which was used to create the double horn hit in Vogue.
In other words, a highly qualified and trained musician listened to the recordings with the express aim of discerning
which parts of the song had been copied, and he could not do so accurately. An average audience would not do a
better job.
In sum, the district court correctly held that summary judgment to Defendants was appropriate on the issue of de
minimis copying.
B. The De Minimis Exception and Sound Recordings
Plaintiff argues, in the alternative, that even if the copying here is trivial, that fact is irrelevant because the de (5) pictorial, graphic, and sculptural works;
minimis exception does not apply to infringements of copyrighted sound recordings. Plaintiff urges us to follow the
Sixth Circuit's decision in Bridgeport Music, Inc. v. Dimension Films, 410 F.3d 792 (6th Cir. 2005), which adopted a (6) motion pictures and other audiovisual works;
bright-line rule: For copyrighted sound recordings, any unauthorized copying—no matter how trivial—constitutes
infringement. (7) sound recordings; and

The rule that infringement occurs only when a substantial portion is copied is firmly established in the law. The (8) architectural works.
leading copyright treatise traces the rule to the mid-1800s. 4 Melville B. Nimmer & David Nimmer, Nimmer on
Copyright § 13.03[A][2][a], at 13-56 to 13-57, 13-57 n.102 (2013) (citing Folsom v. Marsh, 9 F. Cas. 342, No. 4901
(Emphasis added.) That provision treats sound recordings identically to all other types of protected works; nothing in
(C.C. Mass. 1841)); id. § 13.03[E][2], at 13-100 & n.208 (citing Daly v. Palmer, 6 F. Cas. 1132, No. 3,552
the text suggests differential treatment, for any purpose, of sound recordings compared to, say, literary works.
(C.C.S.D.N.Y. 1868)); see also Perris v. Hexamer, 99 U.S. (9 Otto) 674, 675–76 (1878) (stating that a “copyright
Similarly, nothing in the neutrally worded statutory definition of “sound recordings” suggests that Congress intended
gives the author or the publisher the exclusive right of multiplying copies of what he has written or printed. It
to eliminate the de minimis exception. See id. § 101 (“ ‘Sound recordings' are works that result from the fixation of a
follows that to infringe this right a substantial copy of the whole or of a material part must be produced.”); Dymow,
series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other
11 F.2d 690 (applying the rule in 1926). We recognized the rule as early as 1977: “If copying is established, then
audiovisual work, regardless of the nature of the material objects, such as disks, tapes, or other phonorecords, in
only does there arise the second issue, that of illicit copying (unlawful appropriation). On that issue the test is the
which they are embodied.”).
response of the ordinary lay hearer ․” Sid & Marty Krofft Television Prods., Inc. v. McDonald's Corp., 562 F.2d 1157,
1164 (9th Cir. 1977) (alteration and internal quotation marks omitted), superseded in other part by 17 U.S.C. §
504(b); see Fisher, 794 F.2d at 434 n.2 (using the term “de minimis” to describe the concept). The reason for the Title 17 U.S.C. § 106, titled “Exclusive rights in copyrighted works,” states:
rule is that the “plaintiff's legally protected interest [is] the potential financial return from his compositions which
derive from the lay public's approbation of his efforts.” Krofft, 562 F.2d at 1165 (quoting Arnstein v. Porter, 154 F.2d Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to
464, 473 (2d Cir. 1946)). If the public does not recognize the appropriation, then the copier has not benefitted from authorize any of the following:
the original artist's expressive content. Accordingly, there is no infringement.
(1) to reproduce the copyrighted work in copies or phonorecords;
Other than Bridgeport and the district courts following that decision, we are aware of no case that has held that the
de minimis doctrine does not apply in a copyright infringement case. Instead, courts consistently have applied the (2) to prepare derivative works based upon the copyrighted work;
rule in all cases alleging copyright infringement. Indeed, we stated in dictum in Newton that the rule “applies
throughout the law of copyright, including cases of music sampling.” 9 388 F.3d at 1195 (emphasis added). (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership,
or by rental, lease, or lending;
Plaintiff nevertheless argues that Congress intended to create a special rule for copyrighted sound recordings,
eliminating the de minimis exception. We begin our analysis with the statutory text. (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other
audiovisual works, to perform the copyrighted work publicly;
Title 17 U.S.C. § 102, titled “Subject matter of copyright: In general,” states, in relevant part:
(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or
(a) Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible sculptural works, including the individual images of a motion picture or other audiovisual work, to display the
medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise copyrighted work publicly; and
communicated, either directly or with the aid of a machine or device. Works of authorship include the following
categories: (6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio
transmission.
(1) literary works;
Again, nothing in that provision suggests differential treatment of de minimis copying of sound recordings compared
(2) musical works, including any accompanying words; to, say, sculptures. Although subsection (6) deals exclusively with sound recordings, that subsection concerns public
performances; nothing in its text bears on de minimis copying.
(3) dramatic works, including any accompanying music;
Instead, Plaintiff's statutory argument hinges on the third sentence of 17 U.S.C. § 114(b), which states: 10
(4) pantomimes and choreographic works;
The exclusive rights of the owner of copyright in a sound recording under clauses (1) and (2) of section 106 do not
extend to the making or duplication of another sound recording that consists entirely of an independent fixation of
other sounds, even though such sounds imitate or simulate those in the copyrighted sound recording.
Like all the other sentences in § 114(b), the third sentence imposes an express limitation on the rights of a copyright
holder: “The exclusive rights of the owner of a copyright in a sound recording ․ do not extend to the making or
duplication of another sound recording [with certain qualities].” Id. (emphasis added); see id. (first sentence:
“exclusive rights ․ do not extend” to certain circumstances; second sentence: “exclusive rights ․ do not extend” to
certain circumstances; fourth sentence: “exclusive rights ․ do not apply” in certain circumstances). We ordinarily
would hesitate to read an implicit expansion of rights into Congress' statement of an express limitation on rights.
Given the considerable background of consistent application of the de minimis exception across centuries of
jurisprudence, we are particularly hesitant to read the statutory text as an unstated, implicit elimination of that
steadfast rule.
A straightforward reading of the third sentence in § 114(b) reveals Congress' intended limitation on the rights of a
sound recording copyright holder: A new recording that mimics the copyrighted recording is not an infringement,
even if the mimicking is very well done, so long as there was no actual copying. That is, if a band played and
recorded its own version of Love Break in a way that sounded very similar to the copyrighted recording of Love
Break, then there would be no infringement so long as there was no actual copying of the recorded Love Break. But
the quoted passage does not speak to the question that we face: whether Congress intended to eliminate the
longstanding de minimis exception for sound recordings in all circumstances even where, as here, the new sound
recording as a whole sounds nothing like the original.
Even if there were some ambiguity as to congressional intent with respect to § 114(b), the legislative history clearly
confirms our analysis on each of the above points. Congress intended § 114 to limit, not to expand, the rights of
copyright holders: “The approach of the bill is to set forth the copyright owner's exclusive rights in broad terms in
section 106, and then to provide various limitations, qualifications, or exemptions in the 12 sections that follow.
Thus, everything in section 106 is made ‘subject to sections 107 through 118,’ and must be read in conjunction with
those provisions.” H.R. Rep. No. 94-1476, at 61 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5674.
With respect to § 114(b) specifically, a House Report stated:
Subsection (b) of section 114 makes clear that statutory protection for sound recordings extends only to the
particular sounds of which the recording consists, and would not prevent a separate recording of another
performance in which those sounds are imitated. Thus, infringement takes place whenever all or any substantial
portion of the actual sounds that go to make up a copyrighted sound recording are reproduced in phonorecords by
repressing, transcribing, recapturing off the air, or any other method, or by reproducing them in the soundtrack or
audio portion of a motion picture or other audiovisual work. Mere imitation of a recorded performance would not
constitute a copyright infringement even where one performer deliberately sets out to simulate another's
performance as exactly as possible.
Id. at 106, reprinted in 1976 U.S.C.C.A.N. at 5721 (emphasis added). That passage strongly supports the natural
reading of § 114(b), discussed above. Congress intended to make clear that imitation of a recorded performance
cannot be infringement so long as no actual copying is done. There is no indication that Congress intended, through
§ 114(b), to expand the rights of a copyright holder to a sound recording.
Perhaps more importantly, the quoted passage articulates the principle that “infringement takes place whenever all
or any substantial portion of the actual sounds ․ are reproduced.” Id. (emphasis added). That is, when enacting this
specific statutory provision, Congress clearly understood that the de minimis exception applies to copyrighted sound
recordings, just as it applies to all other copyrighted works. In sum, the statutory text, confirmed by the legislative
history, reveals that Congress intended to maintain the de minimis exception for copyrighted sound recordings.
In coming to a different conclusion, the Sixth Circuit reasoned as follows:
[T]he rights of sound recording copyright holders under clauses (1) and (2) of section 106 “do not extend to the
making or duplication of another sound recording that consists entirely of an independent fixation of other sounds,
even though such sounds imitate or simulate those in the copyrighted sound recording.” 17 U.S.C. § 114(b)
(emphasis added). The significance of this provision is amplified by the fact that the Copyright Act of 1976 added the
word “entirely” to this language. Compare Sound Recording Act of 1971, Pub. L. 92-140, 85 Stat. 391 (Oct. 15,
1971) (adding subsection (f) to former 17 U.S.C. § 1) (“does not extend to the making or duplication of another
sound recording that is an independent fixation of other sounds”). In other words, a sound recording owner has the
exclusive right to “sample” his own recording.
Bridgeport, 410 F.3d at 800–01.
We reject that interpretation of § 114(b). Bridgeport ignored the statutory structure and § 114(b)'s express limitation
on the rights of a copyright holder. Bridgeport also declined to consider legislative history on the ground that “digital
sampling wasn't being done in 1971.” 410 F.3d at 805. But the state of technology is irrelevant to interpreting
Congress' intent as to statutory structure. Moreover, as Nimmer points out, Bridgeport's reasoning fails on its own
terms because contemporary technology plainly allowed the copying of small portions of a protected sound
recording. Nimmer § 13.03[A][2][b], at 13-62 n.114.16.
Close examination of Bridgeport's interpretive method further exposes its illogic. In effect, Bridgeport inferred from
the fact that “exclusive rights ․ do not extend to the making or duplication of another sound recording that consists
entirely of an independent fixation of other sounds,” 17 U.S.C. § 114(b) (emphases added), the conclusion that
exclusive rights do extend to the making of another sound recording that does not consist entirely of an independent
fixation of other sounds. As pointed out by Nimmer, Bridgeport's interpretive method “rests on a logical fallacy.”
Nimmer § 13.03 [A][2][b], at 13-61; see also Saregama India Ltd. v. Mosley, 687 F. Supp. 2d 1325, 1340–41 (S.D.
Fla. 2009) (critiquing Bridgeport's interpretive method for a similar reason). A statement that rights do not extend to
a particular circumstance does not automatically mean that the rights extend to all other circumstances. In logical
terms, it is a fallacy to infer the inverse of a conditional from the conditional. E.g., Joseph G. Brennan, A Handbook
of Logic 79–80 (2d ed. 1961).
For example, take as a given the proposition that “if it has rained, then the grass is not dry.” It does not necessarily
follow that “if it has not rained, then the grass is dry.” Someone may have watered the lawn, for instance. We
cannot infer the second if-then statement from the first. The first if-then statement does not tell us anything about
the condition of the grass if it has not rained. Accordingly, even though it is true that, “if the recording consists
entirely of independent sounds, then the copyright does not extend to it,” that statement does not necessarily mean
that “if the recording does not consist entirely of independent sounds, then the copyright does extend to it.”
The Sixth Circuit also looked beyond the statutory text, to the nature of a sound recording, and reasoned:
[E]ven when a small part of a sound recording is sampled, the part taken is something of value. No further proof of
that is necessary than the fact that the producer of the record or the artist on the record intentionally sampled
because it would (1) save costs, or (2) add something to the new recording, or (3) both. For the sound recording
copyright holder, it is not the “song” but the sounds that are fixed in the medium of his choice. When those sounds
are sampled they are taken directly from that fixed medium. It is a physical taking rather than an intellectual one.
Bridgeport, 410 F.3d at 801–02 (footnote omitted).
We disagree for three reasons. First, the possibility of a “physical taking” exists with respect to other kinds of artistic
works as well, such as photographs, as to which the usual de minimis rule applies. See, e.g., Sandoval v. New Line
Cinema Corp., 147 F.3d 215, 216 (2d Cir. 1998) (affirming summary judgment to the defendant because the
defendant's use of the plaintiff's photographs in a movie was de minimis). A computer program can, for instance,
“sample” a piece of one photograph and insert it into another photograph or work of art. We are aware of no
copyright case carving out an exception to the de minimis requirement in that context, and we can think of no
principled reason to differentiate one kind of “physical taking” from another. Second, even accepting the premise
that sound recordings differ qualitatively from other copyrighted works and therefore could warrant a different
infringement rule, that theoretical difference does not mean that Congress actually adopted a different rule. Third,
the distinction between a “physical taking” and an “intellectual one,” premised in part on “sav[ing] costs” by not
having to hire musicians, does not advance the Sixth Circuit's view. The Supreme Court has held unequivocally that
the Copyright Act protects only the expressive aspects of a copyrighted work, and not the “fruit of the [author's]
labor.” Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 349 (1991). Indeed, the Supreme Court in Feist
explained at length why, though that result may seem unfair, protecting only the expressive aspects of a copyrighted
work is actually a key part of the design of the copyright laws. Id. at 349–54 (explaining how “the ‘sweat of the
brow’ doctrine flouted basic copyright principles”). Accordingly, all that remains of Bridgeport's argument is that the
second artist has taken some expressive content from the original artist. But that is always true, regardless of the
nature of the work, and the de minimis test nevertheless applies. See Nimmer § 13.03[A][2][b], at 13-63 to 13-64
(providing a similar critique of Bridgeport's physical/intellectual distinction and concluding that it “seems to be built
on air”).
Because we conclude that Congress intended to maintain the “de minimis” exception for copyrights to sound
recordings, we take the unusual step of creating a circuit split by disagreeing with the Sixth Circuit's contrary holding
in Bridgeport. We do so only after careful reflection because, as we noted in Seven Arts Filmed Entertainment Ltd. v.
Content Media Corp., 733 F.3d 1251, 1256 (9th Cir. 2013), “the creation of a circuit split would be particularly
troublesome in the realm of copyright. Creating inconsistent rules among the circuits would lead to different levels of
protection in different areas of the country, even if the same alleged infringement is occurring nationwide.” (Citation,
internal quotations marks, and brackets omitted.) We acknowledge that our decision has consequences. But the goal
of avoiding a circuit split cannot override our independent duty to determine congressional intent. Otherwise, we
would have no choice but to blindly follow the rule announced by whichever circuit court decided an issue first, even
if we were convinced, as we are here, that our sister circuit erred.
Moreover, other considerations suggest that the “troublesome” consequences ordinarily attendant to the creation of
a circuit split are diminished here. In declining to create a circuit split in Seven Arts, we noted that “the leading
copyright treatise,” Nimmer, agreed with the view of our sister circuits. 733 F.3d at 1255. As to the issue before us,
by contrast, Nimmer devotes many pages to explaining why the Sixth Circuit's opinion is, in no uncertain terms,
wrong. Nimmer § 13.03[A][2][b], at 13-59 to 13-66.
Additionally, as a practical matter, a deep split among the federal courts already exists. Since the Sixth Circuit
decided Bridgeport, almost every district court not bound by that decision has declined to apply Bridgeport's rule.
See, e.g., Saregama, 687 F. Supp. 2d at 1340–41 (rejecting Bridgeport' s rule after analysis); Steward v. West, No.
13-02449, Docket No. 179 at 14 n.8 (C.D. Cal. 2014) (unpublished civil minutes) (“declin[ing] to follow the per se
infringment analysis from Bridgeport” because Bridgeport “has been criticized by courts and commentators alike”);
Batiste v. Najm, 28 F. Supp. 3d 595, 625 (E.D. La. 2014) (noting that, because some courts have declined to apply
Bridgeport's rule, “it is far from clear” that Bridgeport's rule should apply); Pryor v. Warner/Chappell Music, Inc., No.
CV13-04344, 2014 WL 2812309, at *7 n.3 (C.D. Cal. June 20, 2014) (unpublished) (declining to apply Bridgeport's
rule because it has not been adopted by the Ninth Circuit); Zany Toys, LLC v. Pearl Enters., LLC, No. 13-5262, 2014
WL 2168415, at *11 n.7 (D.N.J. May 23, 2014) (unpublished) (stating Bridgeport's rule without discussion); see also
EMI Records Ltd v. Premise Media Corp., No. 601209, 2008 WL 5027245 (N.Y. Sup. Ct. Aug. 8, 2008) (unpublished)
(expressly rejecting Bridgeport's analysis). Although we are the first circuit court to follow a different path than
Bridgeport's, we are in well-charted territory.
Plaintiff next argues that, because Congress has not amended the copyright statute in response to Bridgeport, we
should conclude that Bridgeport correctly divined congressional intent. We disagree. The Supreme Court has held
that congressional inaction in the face of a judicial statutory interpretation, even with respect to the Supreme Court's
own decisions affecting the entire nation, carries almost no weight. See Alexander v. Sandoval, 532 U.S. 275, 292
(2001) (“It is impossible to assert with any degree of assurance that congressional failure to act represents
affirmative congressional approval of the Court's statutory interpretation.” (internal quotation marks omitted)). Here,
Congress' inaction with respect to a decision by one circuit court has even less import, especially considering that
many other courts have declined to apply Bridgeport's rule.
Finally, Plaintiff advances several reasons why Bridgeport's rule is superior as a matter of policy. For example, the
Sixth Circuit opined that its bright-line rule was easy to enforce; that “the market will control the license price and
keep it within bounds”; and that “sampling is never accidental” and is therefore easy to avoid. Bridgeport, 410 F.3d
at 801. Those arguments are for a legislature, not a court. They speak to what Congress could decide; they do not
inform what Congress actually decided.11
We hold that the “de minimis” exception applies to actions alleging infringement of a copyright to sound recordings.
C. Attorney's Fees
Finally, we consider the district court's award of attorney's fees to Defendants. The Copyright Act permits a court to
“award a reasonable attorney's fee to the prevailing party.” 17 U.S.C. § 505. “[A]ttorney's fees are to be awarded to
prevailing parties only as a matter of the court's discretion.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994). “In
deciding whether to award fees under the Copyright Act, the district court should consider, among other things: the
degree of success obtained on the claim; frivolousness; motivation; objective reasonableness of factual and legal
arguments; and need for compensation and deterrence.” Maljack Prods., Inc. v. GoodTimes Home Video Corp., 81
F.3d 881, 889 (9th Cir. 1996).
Here, the district court concluded that Plaintiff's legal claim premised on Bridgeport was objectively unreasonable
because, in the court's view, Plaintiff should have been aware of the critiques of Bridgeport and should have
declined to bring the claim. In relying on that reasoning, the court erred as a matter of law. It plainly is reasonable
to bring a claim founded on the only circuit-court precedent to have considered the legal issue, whether or not our
circuit ultimately agrees with that precedent.
The district court also ruled that Plaintiff's claim was objectively unreasonable because of issues that hinged on
“disputed facts and credibility determinations.” Again, the court erred as a matter of law. If a plaintiff has a claim
that hinges on disputed facts sufficient to reach a jury, that claim necessarily is reasonable because a jury might
decide the case in the plaintiff's favor.
Because the district court erred in finding that Plaintiff's claim was objectively unreasonable, we vacate the award of
fees and remand for reconsideration.
Judgment AFFIRMED; award of fees VACATED and REMANDED for reconsideration. The parties shall bear their own
costs on appeal.
The plaintiff is the owner of a copyright in a fixed sound recording. This is a valuable property right, the stock-in-
trade of artists who make their living recording music and selling records. The plaintiff alleges that the defendants,
without a license or any sort of permission, physically copied a small part of the plaintiff's sound recording – which,
to repeat, is property belonging to the plaintiff – and, having appropriated it, inserted into their own recording. If the
plaintiff's allegations are to be believed, the defendants deemed this maneuver preferable to paying for a license to
use the material, or to hiring their own musicians to record it. In any other context, this would be called theft. It is
no defense to theft that the thief made off with only a “de minimis” part of the victim's property.
The majority chooses to follow the views of a popular treatise instead of an on-point decision of the Sixth Circuit, a
decision that has governed the music industry in Nashville – “Music City” 1 – and elsewhere for over a decade without
causing either the sky to fall in, or Congress to step in. And just exactly what is the Sixth Circuit's radical holding in
Bridgeport Music, Inc. v. Dimension Films that the majority finds so distasteful? It's this: if you want to use an
identical copy of a portion of a copyrighted fixed sound recording – we're not talking about “substantially similar”
tunes or rhythms, but an actual identical copy of a sound that has already been recorded in a fixed medium – get a
license. You can't just take it. 410 F.3d 792, 800–01 (6th Cir. 2005).
As the majority acknowledges, after Newton v. Diamond, 388 F.3d 1189 (9th Cir. 2003), it is an “open question” in
the Ninth Circuit whether a de minimis defense applies to fixed sound recordings as it does to less tangible works.
The Bridgeport court explained why it should not.
First, by statute, sound recording copyright holders have an exclusive right to sample their own recordings. It's an
exclusive right; the statute does not give that right to others. 410 F.3d at 800–01. Under 17 U.S.C. §§ 106 and 114,
the holder of a copyright in a sound recording (but not others) has the exclusive right to reproduce the work in
copies or records “that directly or indirectly recapture the actual sounds fixed in the recording,” as well as the
exclusive right to prepare derivative works “in which the actual sounds fixed in the sound recording are rearranged,
remixed, or otherwise altered in sequence or quality.” 17 U.S.C. §§ 106(1) and (2); 114(b). Congress clearly
qualified these exclusive rights, writing that “another sound recording that consists entirely of an independent
fixation of other sounds, even though such sounds imitate or simulate those in the copyrighted sound recording” are
not within the scope of the copyright holder's exclusive rights. 17 U.S.C. § 114(b). In other words, the world at large
is free to imitate or simulate the creative work fixed in the recording (like a tribute band, for example) so long as an
actual copy of the sound recording itself is not made. 410 F.3d at 800.
The majority rejects this straightforward reading, explaining by way of a rhetorical exercise that Bridgeport's reading
of § 114(b) is a logical fallacy, expanding the rights of copyright holders beyond that allowed under the judicial de
minimis rule. As I see it, it is the majority that tortures the natural reading of these provisions. Bear in mind that §
114(b) simply explains the scope of exclusive rights already granted to copyright holders under § 106. These two
provisions must be read together, as the Sixth Circuit did. 410 F.3d at 799–801. When read together, their message
is clear: copyright holders have exclusive rights to their recordings, but cannot be heard to complain (i.e., there can
be no infringement of those exclusive rights) where a new recording consists entirely of independently created
sounds, such as might be found in a very good imitation. By the same token, if a new recording includes something
other than independently created sounds, such as a blatant copy, the copyright holder whose work was sampled has
a legitimate gripe. That right was not invented by the Sixth Circuit: it already exists in the statutes. And these
statutes say nothing about the de minimis exception.
The second reason the Sixth Circuit gave for not adopting the de minimis rule is that sound recordings are different
than their compositional counterparts: when a defendant copies a recording, he or she takes not the song but the
sounds as they are fixed in the medium of the copyright holders' choice. Id. at 801–02. In other words, the very
nature of digital sampling makes a de minimis analysis inapplicable, since sampling or pirating necessarily involves
copying a fixed performance. See id. at 801 n.13. The defendants wanted horns to punctuate their song, so they
took the plaintiff's copyrighted recording of horns. The horn hit is brief, but clearly perceptible and does its job. This
is unlike indiscernible photographs used, not for their content (which cannot be made out), but to dress a movie set.
See Sandoval v. New Line Cinema Corp., 147 F.2d 215, 218 (2d Cir. 1998).
This is a physical taking, not an intellectual one. Id. at 802. Sampling is never accidental. Id. at 801. As the Sixth
Circuit observed, it is not like the case of a composer who has a melody in his head, perhaps not even realizing that
the reason he hears this melody is that it is the work of another that he has heard before. Id. When you sample a
sound recording you know you are taking another's work product. Id. Accordingly, the pertinent inquiry in a
sampling case is not whether a defendant sampled a little or a lot, but whether a defendant sampled at all. Id. at
798 n.6, 801–02 and n.13.
Again, the majority disagrees, rejecting Bridgeport's characterization of a sample as a “physical taking” on the basis
that copyright protection extends only to expressive aspects of a work, not the fruit of the author's labor. According
to the majority, copyright protection doesn't extend to the sweat of an author's brow. Feist Publ'ns, Inc. v. Rural Tel.
Serv. Co., 499 U.S. 340, 349 (1991) (discussing originality as applied to factual compilations, such as telephone
directories). But that's irrelevant here, since there is no question that the underlying sound recording can be
copyrighted, and it is the taking of that protectable work that is at issue.
I find Bridgeport's arguments well-reasoned and persuasive. Equally compelling is, I think, Congress's silence in the
wake of Bridgeport, especially in light of the fact that the Sixth Circuit explicitly invited Congress to clarify or change
the law if Bridgeport's bright-line rule was not what Congress intended. 410 F.3d at 805. While it's true that
congressional inaction in the face of judicial interpretation is not ironclad evidence of Congressional approval, see
Alexander v. Sandoval, 532 U.S. 275, 292 (2001), it's not chopped liver either. In this case Bridgeport has not been
hiding out in the woods, waiting to be found: it has been governing the music industry in Nashville and elsewhere
for eleven years. The majority now proposes to introduce a different rule for this circuit, creating a circuit split, and
providing a lower level of protection for copyright holders in a different area of the country. See Seven Arts Filmed
Entertainment Ltd. v. Content Media Corp. PLC, 733 F.3d 1251, 1256 (9th Cir. 2013). This inconsistent approach is
plainly in contravention of Congressional intent that copyright laws be predictable and uniform, yet the majority
defends its rogue path on the ground that Congress must have intended something other than what the Sixth Circuit
has concluded, even though we've heard not a peep from Congress, or for that matter the Supreme Court, in the
eleven years since Bridgeport has been on the books.
In short, the majority's fuzzy approach would require a factual and largely visceral inquiry into whether each and
every instance of sampling was “substantial,” whereas Bridgeport provides in the case of a fixed sound recording a
bright-line rule, and I quote: “Get a license or do not sample.” 410 F.3d at 801. True, Get a license or do not sample
doesn't carry the same divine force as Thou Shalt Not Steal, but it's the same basic idea. I would hold that the de
minimis exception does not apply to the sampling, copying, stealing, pirating, misappropriation – call it what you will
– of copyrighted fixed sound recordings. Once the sound is fixed, it is tangible property belonging to the copyright
holder, and no one else has the right to take even a little of it without permission. I therefore respectfully dissent.
——o0o——
United States Court of Appeals,Second Circuit.
WNET, THIRTEEN, Fox Television Stations, Inc., Twentieth Century Fox Film Corporation, Wpix, Inc.,
Univision Television Group, Inc., The Univision Network Limited Partnership, and Public Broadcasting
Service, Plaintiffs–Counter–Defendants–Appellants, v. AEREO, INC., f/k/a Bamboom Labs, Inc.,
Defendant–Counter–Claimant–Appellee,
American Broadcasting Companies, Inc., Disney Enterprises, Inc., CBS Broadcasting Inc., CBS Studios
Inc., NBCUniversal Media, LLC, NBC Studios, LLC, Universal Network Television, LLC, Telemundo
Network Group LLC, and WNJU–TV Broadcasting LLC, Plaintiffs–Counter–Defendants -Appellants, v.
Aereo, Inc., Defendant–Counter–Claimant–Appellee.
Docket Nos. 12–2786–cv, 12–2807–cv.
Decided: April 01, 2013
Before CHIN and DRONEY, Circuit Judges, GLEESON, District Judge. *Paul M. Smith, Steven B. Fabrizio, Scott B.
Wilkens, Matthew E. Price, Jenner & Block LLP, Washington, DC; Richard L. Stone, Amy M. Gallegos, Jenner & Block
LLP, Los Angeles, CA, for Plaintiffs–Appellants WNET, Thirteen, et al. Bruce P. Keller, Jeffrey P. Cunard, Michael R.
Potenza, Debevoise & Plimpton LLP, New York, NY, for Plaintiffs–Appellants Am. Broad. Cos., Inc., et al. R. David
Hosp, John C. Englander, Mark S. Puzella, Yvonne W. Chan, Erin M. Michael, Goodwin Procter LLP, Boston, MA;
Michael S. Elkin, Thomas P. Lane, Winston & Strawn LLP, New York, NY; Seth D. Greenstein, Constantine Cannon
LLP, Washington, DC; Jennifer A. Golinveaux, Winston & Strawn LLP, San Francisco, CA, for Defendant–Appellee.
Robert Alan Garrett, Lisa S. Blatt, Stephen M. Marsh, R. Stanton Jones, Arnold & Porter LLP, Washington, DC, for
amici curiae National Basketball Association, NBA Media Ventures, LLC, NBA Properties, Inc., National Football
League, National Hockey League, Office of the Commissioner of Baseball, and MLB Advanced Media, L.P. in support
of Plaintiffs–Appellants. Kelly M. Klaus, Munger, Tolles & Olson LLP, Los Angeles, CA; Samantha Dulaney, I.A.T.S.E.
In House Counsel, New York, NY; Duncan W. Crabtree–Ireland, Chief Administrative Officer & General Counsel,
SAGAFTRA, Los Angeles, CA; Anthony R. Segall, Rothner, Segall & Greenstone, Pasadena, CA; Susan Cleary, Vice
President & General Counsel, Independent Film & Television Alliance, Los Angeles, CA, for amici curiae Paramount
Pictures Corporation, Warner Bros. Entertainment Inc., Directors Guild of America, Inc., Alliance of Theatrical Stage
Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, Its Territories and Canada,
AFL–CIO, CLC, Screen Actors Guild–American Federation of Television and Radio Artists, Writers Guild of America,
West, Inc., Independent Film & Television Alliance, Lions Gate Entertainment, Inc., and Metro–Goldwyn–Mayer
Studios Inc. in support of Plaintiffs–Appellants. Robert A. Long, Matthew S. DelNero, Daniel Kahn, Covington &
Burling LLP, Washington, DC, for amici curiae The National Association of Broadcasters, The ABC Television Affiliates
Association, The CBS Television Network Affiliates Association, The NBC Television Affiliates, and The Fox Television
Affiliates Association in support of Plaintiffs–Appellants. Jeffrey A. Lamken, Robert K. Kry, MoloLamken LLP,
Washington, DC, for amicus curiae Cablevision Systems Corporation in support of Plaintiffs–Appellants. Steven J.
Metalitz, Eric J. Schwartz, J. Matthew Williams, Mitchell Silberberg & Knupp LLP, Washington, DC; Paul V. LiCalsi,
Mitchell Silberberg & Knupp LLP, New York, NY, for amici curiae The American Society of Composers, Authors and
Publishers, Broadcast Music, Inc., The National Music Publishers Association, The Association of Independent Music
Publishers, The Church Music Publishers Association, The Nashville Songwriters Association International, The
Recording Industry Association of America, the Recording Academy, SESAC, Inc., The Society of Composers &
Lyricists, The Songwriters Guild of America, Inc., and Soundexchange, Inc., in support of Plaintiffs–Appellants. Ralph
Oman, The George Washington University Law School, Washington, DC, for amicus curiae Ralph Oman, Former
Register of Copyrights of the United States in support of Plaintiffs–Appellants. Jonathan Band, Jonathan Band PLLC,
Washington, DC, for amici curiae The Computer & Communications Industry Association and The Internet
Association in support of Defendant–Appellee. Michael C. Rakower, Law Office of Michael C. Rakower, P.C., New
York, NY, for amici curiae Intellectual Property and Copyright Law Professors in support of Defendant–Appellee.
Mitchell L. Stoltz, Electronic Frontier Foundation, San Francisco, CA; Sherin Siy, John Bergmayer, Public Knowledge,
Washington, DC; Michael Petricone, Consumer Electronics Association, Arlington, VA, for amici curiae The Electronic
Frontier Foundation, Public Knowledge, and The Consumer Electronics Association in support of Defendant–Appellee.
Peter Jaszi, Kate Collins, Seth O. Dennis, Sarah K. Leggin, Bijan Madhani, American University Washington College of
Law, Washington, DC, for amici curiae The Consumer Federation of America and Consumers Union in support of
Defendant–Appellee.
Aereo, Inc. (“Aereo”) enables its subscribers to watch broadcast television programs over the internet for a monthly
fee. Two groups of plaintiffs, holders of copyrights in programs broadcast on network television, filed copyright
infringement actions against Aereo in the United States District Court for the Southern District of New York. They
moved for a preliminary injunction barring Aereo from transmitting programs to its subscribers while the programs
are still airing, claiming that those transmissions infringe their exclusive right to publicly perform their works. The
district court (Nathan, J.) denied the motion, concluding that the plaintiffs were unlikely to prevail on the merits in
light of our prior decision in Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir.2008)
(“Cablevision ”). We agree and affirm the order of the district court denying the motion for a preliminary injunction.1
BACKGROUND
The parties below agreed on all but one of the relevant facts of Aereo's system, namely whether Aereo's antennas
operate independently or as a unit. The district court resolved that issue, finding that Aereo's antennas operate
independently. The Plaintiffs do not appeal that factual finding. Thus the following facts are undisputed.
I. Aereo's System
Aereo transmits to its subscribers broadcast television programs over the internet for a monthly subscription fee.
Aereo is currently limited to subscribers living in New York City and offers only New York area channels. It does not
have any license from copyright holders to record or transmit their programs.
The details of Aereo's system are best explained from two perspectives. From its subscribers' perspective, Aereo
functions much like a television with a remote Digital Video Recorder (“DVR”) and Slingbox.2 Behind the scenes,
Aereo's system uses antennas and a remote hard drive to create individual copies of the programs Aereo users wish
to watch while they are being broadcast or at a later time. These copies are used to transmit the programs to the
Aereo subscriber.
A. The Subscriber's Perspective
Aereo subscribers begin by logging on to their account on Aereo's website using a computer or other internet-
connected device. They are then presented with a programming guide listing broadcast television programs now
airing or that will air in the future. If a user selects a program that is currently airing, he is presented with two
options: “Watch” and “Record.” If the user selects “Watch,” the program he selected begins playing, but the
transmission is briefly delayed relative to the live television broadcast.3 Thus the user can watch the program nearly
live, that is, almost contemporaneously with the over-the-air broadcast. While the user is watching the program with
the “Watch” function, he can pause or rewind it as far back as the point when the user first began watching the
program.4 This may result in the user watching the program with the “Watch” feature after the over-the-air
broadcast has ended. At any point while watching the program with the “Watch” feature, the user can select the
“Record” button, which will cause Aereo's system to save a copy of the program for later viewing. The recorded copy
of the program will begin from the point when the user first began watching the program, not from the time when
the user first pressed the “Record” button.5 If a user in “Watch” mode does not press “Record” before the
conclusion of the program, the user is not able to watch that program again later.
An Aereo user can also select a program that is currently airing and press the “Record” button. In that case, a copy
of the program will be saved for later viewing. However, the “Record” function can also be used to watch a program
nearly live, because the user can begin playback of the program being recorded while the recording is being made.
Thus the difference between selecting the “Watch” and the “Record” features for a program currently airing is that
the “Watch” feature begins playback and a copy of the program is not retained for later viewing, while the “Record”
feature saves a copy for later viewing but does not begin playback without further action by the user.
If an Aereo user selects a program that will air in the future, the user's only option is the “Record” function. When
the user selects that function, Aereo's system will record the program when it airs, saving a copy for the user to
watch later. An Aereo user cannot, however, choose either to “Record” or “Watch” a program that has already
finished airing if he did not previously elect to record the program.
The final notable feature of Aereo's system is that users can watch Aereo programing on a variety of devices.
Aereo's primary means of transmitting a program to a user is via an internet browser, which users can access on
their computers. Aereo users can also watch programs on mobile devices such as tablets or smart phones using
mobile applications. Finally, Aereo subscribers can watch Aereo on an internet-connected TV or use a stand-alone
device to connect their non-internet TVs to Aereo.
Aereo's system thus provides the functionality of three devices: a standard TV antenna, a DVR, and a Slingbox-like
device. These devices allow one to watch live television with the antenna; pause and record live television and watch
recorded programing using the DVR; and use the Slingbox to watch both live and recorded programs on internet-
connected mobile devices.
B. The Technical Aspects of Aereo's System
Aereo has large antenna boards at its facility in Brooklyn, New York. Each of these boards contains approximately
eighty antennas, which consist of two metal loops roughly the size of a dime. These boards are installed parallel to
each other in a large metal housing such that the antennas extend out of the housing and can receive broadcast TV
signals. Aereo's facility thus uses thousands of individual antennas to receive broadcast television channels.6
When an Aereo user selects a program to watch or record, a signal is sent to Aereo's antenna server. The antenna
server assigns one of the individual antennas and a transcoder to the user. The antenna server tunes that antenna
to the broadcast frequency of the channel showing the program the user wishes to watch or record. The server
transcodes the data received by this antenna, buffers it, and sends it to another Aereo server, where a copy of the
program is saved to a large hard drive in a directory reserved for that Aereo user. If the user has chosen to “Record”
the program, the Aereo system will create a complete copy of the program for that user to watch later. When the
user chooses to view that program, Aereo's servers will stream the program to the user from the copy of the
program saved in the user's directory on the Aereo server. If the user instead has chosen to “Watch” the program,
the same operations occur, except that once six or seven seconds of programming have been saved in the hard
drive copy of the program in the user's directory on the Aereo server, the Aereo system begins streaming the
program to the user from this copy. Thus even when an Aereo user is watching a program using the “Watch”
feature, he is not watching the feed directly or immediately from the antenna assigned to him. Rather the feed from
that antenna is used to create a copy of the program on the Aereo server, and that copy is then transmitted to the
user. If at any point before the program ends, the user in “Watch” mode selects “Record,” the copy of the program
is retained for later viewing. If the user does not press “Record” before the program ends, the copy of the program
created for and used to transmit the program to the user is automatically deleted when it has finished playing.
Three technical details of Aereo's system merit further elaboration. First, Aereo assigns an individual antenna to each
user. No two users share the same antenna at the same time, even if they are watching or recording the same
program.7 Second, the signal received by each antenna is used to create an individual copy of the program in the
user's personal directory. Even when two users are watching or recording the same program, a separate copy of the
program is created for each. Finally, when a user watches a program, whether nearly live or previously recorded, he
sees his individual copy on his TV, computer, or mobile-device screen. Each copy of a program is only accessible to
the user who requested that the copy be made, whether that copy is used to watch the program nearly live or hours
after it has finished airing; no other Aereo user can ever view that particular copy.
II. The Present Suits
Two groups of plaintiffs (the “Plaintiffs”) filed separate copyright infringement actions against Aereo in the Southern
District of New York. They asserted multiple theories, including infringement of the public performance right,
infringement of the right of reproduction, and contributory infringement. ABC and its co-plaintiffs moved for a
preliminary injunction barring Aereo from transmitting television programs to its subscribers while the programs
were still being broadcast. The two sets of plaintiffs agreed to proceed before the district court in tandem, and the
motion for preliminary injunction was pursued in both actions simultaneously.
Following expedited briefing and discovery and an evidentiary hearing, the district court denied the Plaintiffs' motion.
Am. Broad. Cos., Inc. v. Aereo, 874 F.Supp.2d 373, 405 (S.D.N.Y.2012). The district court began its analysis with the
first factor relevant to granting a preliminary injunction: whether the Plaintiffs have demonstrated a likelihood of
success on the merits. Id. at 381 (citing Salinger v. Colting, 607 F.3d 68, 80 (2d Cir.2010)). The district court found
that this factor was determined by our prior decision in Cablevision, 536 F.3d 121. Aereo, 874 F.Supp.2d at 381–82.
After a lengthy discussion of the facts and analysis of that decision, the district court concluded that Aereo's system
was not materially distinguishable from Cablevision's Remote Storage Digital Video Recorder system, which we held
did not infringe copyright holders' public performance right. Id. at 385–86. The district court found unpersuasive
each of the Plaintiffs' arguments attempting to distinguish Cablevision. See id. at 386–96. Thus the court concluded
that the Plaintiffs were unlikely to prevail on the merits. Id. at 396.
The district court then considered the other three preliminary injunction factors. First, the court concluded that the
Plaintiffs had demonstrated a likelihood that they would suffer irreparable harm in the absence of a preliminary
injunction. Id. at 396–402. But second, the district court found that an injunction would severely harm Aereo, likely
ending its business. Id. at 402–03. As such, the balance of hardships did not tip “decidedly” in favor of the Plaintiffs.
Id. at 403. Finally, the district court concluded that an injunction “would not disserve the public interest.” Id. at 403–
04. Because the Plaintiffs had not demonstrated a likelihood of success on the merits or a balance of hardship
tipping decidedly in their favor, the district court denied their motion for a preliminary injunction. Id. at 405. The
Plaintiffs promptly filed an interlocutory appeal, and this case was briefed on an expedited schedule.
DISCUSSION
We review a district court's denial of a preliminary injunction for abuse of discretion. WPIX, Inc. v. ivi, Inc., 691 F.3d
275, 278 (2d Cir.2012). A district court abuses its discretion when its decision rests on legal error or a clearly
erroneous factual finding, or when its decision, though not the product of legal error or a clearly erroneous factual
finding, cannot be located within the range of permissible decisions. Id.
Our decisions identify four factors relevant to granting a preliminary injunction for copyright infringement. First, a
district court may issue a preliminary injunction “only if the plaintiff has demonstrated either (a) a likelihood of
success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for
litigation and a balance of hardships tipping decidedly in the plaintiff's favor.” Salinger v. Colting, 607 F.3d 68, 79
(2d Cir.2010) (internal citation and quotation marks omitted). Second, a plaintiff seeking a preliminary injunction
must demonstrate “ ‘that he is likely to suffer irreparable injury in the absence of’ “ an injunction. Id. at 79–80
(quoting Winter v. Natural Res. Def. Council, 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008)). A court may
not presume irreparable injury in the copyright context; rather the plaintiff must demonstrate actual harm that
cannot be remedied later by damages should the plaintiff prevail on the merits. Id. at 80 (citing eBay Inc. v.
MercExchange, L.L.C., 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006)). Third, a district court “must
consider the balance of hardships between the plaintiff and defendant and issue the injunction only if the balance of
hardships tips in the plaintiff's favor.” Id. Fourth and finally, “the court must ensure that ‘the public interest would
not be disserved’ by the issuance of a preliminary injunction.” Id. (quoting eBay, 547 U.S. at 391).
The outcome of this appeal turns on whether Aereo's service infringes the Plaintiffs' public performance right under
the Copyright Act. The district court denied the injunction, concluding, as mentioned above, that (1) Plaintiffs were
not likely to prevail on the merits given our prior decision in Cablevision and (2) the balance of hardships did not tip
“decidedly” in the Plaintiffs' favor. Aereo, 874 F.Supp.2d at 405. Plaintiffs' likelihood of success on the merits
depends on whether Aereo's service infringes Plaintiffs' copyrights. And, as we discuss further below, the balance of
hardships is largely a function of whether the harm Aereo would suffer from the issuance of an injunction is legally
cognizable, which in turn depends on whether Aereo is infringing the Plaintiffs' copyrights. See ivi, 691 F.3d at 287.
As a result, a preliminary injunction can only be granted if Plaintiffs can show that Aereo infringes their public
performance right. We now turn to that issue.
I. The Public Performance Right
The 1976 Copyright Act (the “Act”) gives copyright owners several exclusive rights and then carves out a number of
exceptions. The fourth of these rights, at issue in this appeal, is the copyright owner's exclusive right “in the case of
literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works,
to perform the copyrighted work publicly.” 17 U.S.C. § 106(4). The Act defines “perform” as “to recite, render, play,
dance, or act [a work], either directly or by means of any device or process or, in the case of a motion picture or
other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.” 17
U.S.C. § 101. The Act also states:
To perform or display a work “publicly” means—
(1) to perform or display it at a place open to the public or at any place where a substantial number of persons
outside of a normal circle of a family and its social acquaintances is gathered; or
(2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or
to the public, by means of any device or process, whether the members of the public capable of receiving the
performance or display receive it in the same place or in separate places and at the same time or at different times.
17 U.S.C. § 101. This appeal turns on the second clause of this definition (the “Transmit Clause” or “Clause”).
The relevant history of the Transmit Clause begins with two decisions of the Supreme Court, Fortnightly Corp. v.
United Artists Television, Inc., 392 U.S. 390, 88 S.Ct. 2084, 20 L.Ed.2d 1176 (1968), and Teleprompter Corp. v.
Columbia Broadcasting System, Inc., 415 U.S. 394, 94 S.Ct. 1129, 39 L.Ed.2d 415 (1974). These decisions held that
under the then-current 1909 Copyright Act, which lacked any analog to the Transmit Clause, a cable television
system that received broadcast television signals via antenna and retransmitted these signals to its subscribers via
coaxial cable did not “perform” the copyrighted works and therefore did not infringe copyright holders' public
performance right. Teleprompter, 415 U.S. at 408; Fortnightly, 392 U.S. at 399–401. Even before these cases were
decided, Congress had begun drafting a new copyright act to respond to changes in technology, most notably, cable
television.
These efforts resulted in the 1976 Copyright Act. The Act responded to the emergence of cable television systems in
two ways. First, it added the Transmit Clause. The legislative history shows that the Transmit Clause was intended in
part to abrogate Fortnightly and Teleprompter and bring a cable television system's retransmission of broadcast
television programming within the scope of the public performance right. H.R. Rep. 94–1476, 1976 U.S.C.C.A.N.
5659, at 63 (1976) (“House Report”) (“[A] sing[er] is performing when he or she sings a song; a broadcasting
network is performing when it transmits his or her performance (whether simultaneously or from records); a local
broadcaster is performing when it transmits the network broadcast; a cable television system is performing when it
retransmits the broadcast to its subscribers; and any individual is performing when he or she plays a phonorecord
embodying the performance or communicates it by turning on a receiving set.”). Second, Congress recognized that
requiring cable television systems to obtain a negotiated license from individual copyright holders may deter further
investment in cable systems, so it created a compulsory license for retransmissions by cable systems .8 See 17
U.S.C. § 111(d).
Plaintiffs claim that Aereo's transmissions of broadcast television programs while the programs are airing on
broadcast television fall within the plain language of the Transmit Clause and are analogous to the retransmissions
of network programing made by cable systems, which the drafters of the 1976 Copyright Act viewed as public
performances. They therefore believe that Aereo is publicly performing their copyrighted works without a license.9
In evaluating their claims, we do not work from a blank slate. Rather, this Court in Cablevision, 536 F.3d 121, closely
analyzed and construed the Transmit Clause in a similar factual context. Thus the question of whether Aereo's
transmissions are public performances under the Transmit Clause must begin with a discussion of Cablevision.
II. Cablevision's Interpretation of the Transmit Clause
In Cablevision, 536 F.3d 121, we considered whether Cablevision's Remote Storage Digital Video Recorder (“RS–
DVR”) infringed copyright holders' reproduction and public performance rights. Cablevision, a cable television
system, wished to offer its customers its newly designed RS–DVR system, which would give them the functionality of
a stand-alone DVR via their cable set-top box. 536 F.3d at 124–25. Before the development of the RS–DVR system,
Cablevision would receive programming from various content providers, such as ESPN or a local affiliate of a national
broadcast network, process it, and transmit it to its subscribers through coaxial cable in real time. Id. With the RS–
DVR system, Cablevision split this stream into two. One stream went out to customers live as before. The second
stream was routed to a server, which determined whether any Cablevision customers had requested to record a
program in the live stream with their RS–DVR. If so, the data for that program was buffered, and a copy of that
program was created for that Cablevision customer on a portion of a Cablevision remote hard drive assigned solely
to that customer. Thus if 10,000 Cablevision customers wished to record the Super Bowl, Cablevision would create
10,000 copies of the broadcast, one for each customer. A customer who requested that the program be recorded
could later play back the program using his cable remote, and Cablevision would transmit the customer's saved copy
of that program to the customer. Only the customer who requested that the RS–DVR record the program could
access the copy created for him; no other Cablevision customer could view this particular copy.10 See 536 F.3d at
124–25.
Copyright holders in movies and television programs sued, arguing that Cablevision's RS–DVR system infringed their
reproduction right by creating unauthorized copies of their programs and their public performance right by
transmitting these copies to Cablevision customers who previously requested to record the programs using their RS–
DVRs. The district court granted the plaintiffs' motion for summary judgment and issued an injunction against
Cablevision. See Twentieth Century Fox Film Corp. v. Cablevision Sys. Corp., 478 F.Supp.2d 607 (S.D.N.Y.2007). The
court found that the RS–DVR infringed the plaintiffs' reproduction right in two ways: (1) by creating temporary
buffer copies of programs in order to create a permanent copy for each of its customers on its hard drives and (2)
by creating a permanent copy of the program for each customer. Id . at 617–22. The court also found that
Cablevision's transmission of a recorded program to the customer who had requested to record the program was a
public performance under the Transmit Clause and therefore was infringing on that basis as well. Id. at 622–23.
This Court reversed on all three issues. Cablevision, 536 F.3d at 140. Because the Plaintiffs in the present cases did
not pursue their claim that Aereo infringes their reproduction right in the injunction application before the district
court, we need not discuss the two reproduction right holdings of Cablevision except where relevant to the public
performance issue. Instead, we will focus on Cablevision's interpretation of the public performance right and the
Transmit Clause, which the court below found determinative of the injunction application.
The Cablevision court began by discussing the language and legislative history of the Transmit Clause. 536 F.3d at
134–35. Based on language in the Clause specifying that a transmission may be “to the public ․ whether the
members of the public capable of receiving the performance ․ receive it in the same place or in separate places and
at the same time or at different times,” 17 U.S.C. § 101, this Court concluded that “it is of no moment that the
potential recipients of the transmission are in different places, or that they may receive the transmission at different
times .” 536 F.3d at 134. As the language makes plain, in determining whether a transmission is to the public it is
important “to discern who is ‘capable of receiving’ the performance being transmitted.” Id. (quoting 17 U.S.C. §
101). Cablevision then decided that “capable of receiving the performance” refers not to the performance of the
underlying work being transmitted but rather to the transmission itself, since the “transmission of a performance is
itself a performance.” Id. The Court therefore concluded that “the transmit clause directs us to examine who
precisely is ‘capable of receiving’ a particular transmission of a performance.” 536 F.3d at 135 (emphasis added).
In adopting this interpretation of the Transmit Clause, Cablevision rejected two alternative readings. First, it
considered the interpretation accepted by the district court in that case. According to that view, a transmission is “to
the public,” not based on the “potential audience of a particular transmission” but rather based on the “potential
audience of the underlying work (i.e., ‘the program’) whose content is being transmitted.” Id. at 135. The
Cablevision court rejected this interpretation of the Transmit Clause. Given that “the potential audience for every
copyrighted audiovisual work is the general public,” this interpretation would render the “to the public” language of
the Clause superfluous and contradict the Clause's obvious contemplation of non-public transmissions. Id. at 135–36.
Second, the Cablevision court considered “a slight variation of this interpretation” offered by the plaintiffs. Id.
Plaintiffs argued that “both in its real-time cablecast and via the RS–DVR playback, Cablevision is in fact transmitting
the ‘same performance’ of a given work: the performance that occurs when the programming service supplying
Cablevision's content transmits that content to Cablevision and the service's other licensees.” Id. In this view, the
Transmit Clause requires courts to consider “not only the potential audience [of a particular] transmission, but also
the potential audience of any transmission of the same underlying ‘original’ performance.” Id. This interpretation of
the Transmit Clause would aggregate all transmissions of the same underlying performance, and if these
transmissions enabled the performance to reach the public, each transmission, regardless of its potential audience,
should be deemed a public performance. Cablevision rejected this view because it would make a seemingly private
transmission public by virtue of actions taken by third parties. Id. For example, if a person records a program and
then transmits that recording to a television in another room, he would be publicly performing the work because
some other party, namely the original broadcaster, had once transmitted the same performance to the public. Id.
The Cablevision court concluded that Congress could not have intended “such odd results”; instead, the Transmit
Clause directed courts to consider only the potential audience of the “performance created by the act of
transmission.” Id. The Cablevision court found this interpretation consistent with prior opinions of this Court
construing the Clause. Id.; see Nat'l Football League v. PrimeTime 24 Joint Venture, 211 F.3d 10 (2d Cir.2000).
Finally, the Cablevision court considered Columbia Pictures Industries, Inc. v. Redd Horne, Inc., 749 F.2d 154 (3d
Cir.1984). In Redd Horne, the defendant operated a video rental store that utilized private booths containing
individual televisions. Customers would select a movie from the store's catalog and enter a booth. A store employee
would then load a copy of the movie into a VCR hard-wired to the TV in the customer's booth and transmit the
content of the tape to the television in the booth. See 749 F.2d at 156–57. The Third Circuit, following an
interpretation of the Transmit Clause first advanced by Professor Nimmer, held that this was a public performance
because the same copy of the work, namely the individual video cassette, was repeatedly “performed” to different
members of the public at different times. Id. at 159 (quoting 2 Melville B. Nimmer & David Nimmer, Nimmer on
Copyright § 8.14[C][3], at 8.192.8(1) (Matthew Bender rev. ed.)). The Cablevision court endorsed this
conclusion11 ; whether a transmission originates from a distinct or shared copy is relevant to the Transmit Clause
analysis because “the use of a unique copy may limit the potential audience of a transmission and is therefore
relevant to whether that transmission is made ‘to the public.’ “ 536 F.3d at 138.
Applying this interpretation of the Transmit Clause to the facts of the RS–DVR, the Cablevision court concluded that
Cablevision's transmission of a recorded program to an individual subscriber was not a public performance. Id. Each
transmission of a program could be received by only one Cablevision customer, namely the customer who requested
that the copy be created. No other Cablevision customer could receive a transmission generated from that particular
copy. The “universe of people capable of receiving an RS–DVR transmission is the single subscriber whose self-made
copy is used to create that transmission.” Id. at 137. The transmission was therefore not made “to the public” within
the meaning of the Transmit Clause and did not infringe the plaintiffs' public performance right. Id. at 138.
We discuss Cablevision's interpretation of the Transmit Clause in such detail because that decision establishes four
guideposts that determine the outcome of this appeal. First and most important, the Transmit Clause directs courts
to consider the potential audience of the individual transmission. See id. at 135. If that transmission is “capable of
being received by the public” the transmission is a public performance; if the potential audience of the transmission
is only one subscriber, the transmission is not a public performance, except as discussed below. Second and
following from the first, private transmissions-that is those not capable of being received by the public-should not be
aggregated. It is therefore irrelevant to the Transmit Clause analysis whether the public is capable of receiving the
same underlying work or original performance of the work by means of many transmissions. See id. at 135–37.
Third, there is an exception to this no-aggregation rule when private transmissions are generated from the same
copy of the work. In such cases, these private transmissions should be aggregated, and if these aggregated
transmissions from a single copy enable the public to view that copy, the transmissions are public performances. See
id. at 137–38. Fourth and finally, “any factor that limits the potential audience of a transmission is relevant” to the
Transmit Clause analysis. Id. at 137.
III. Cablevision's Application to Aereo's System
As discussed above, Cablevision's holding that Cablevision's transmissions of programs recorded with its RS–DVR
system were not public performances rested on two essential facts. First, the RS–DVR system created unique copies
of every program a Cablevision customer wished to record. 536 F.3d at 137. Second, the RS–DVR's transmission of
the recorded program to a particular customer was generated from that unique copy; no other customer could view
a transmission created by that copy. Id. Given these two features, the potential audience of every RS–DVR
transmission was only a single Cablevision subscriber, namely the subscriber who created the copy.12 And because
the potential audience of the transmission was only one Cablevision subscriber, the transmission was not made “to
the public.”
The same two features are present in Aereo's system. When an Aereo customer elects to watch or record a program
using either the “Watch” or “Record” features, Aereo's system creates a unique copy of that program on a portion of
a hard drive assigned only to that Aereo user. And when an Aereo user chooses to watch the recorded program,
whether (nearly) live or days after the program has aired, the transmission sent by Aereo and received by that user
is generated from that unique copy. No other Aereo user can ever receive a transmission from that copy. Thus, just
as in Cablevision, the potential audience of each Aereo transmission is the single user who requested that a program
be recorded.
Plaintiffs offer various arguments attempting to distinguish Cablevision from the Aereo system. First, they argue that
Cablevision is distinguishable because Cablevision had a license to transmit programming in the first instance,
namely when it first aired the programs; thus the question was whether Cablevision needed an additional license to
retransmit the programs recorded by its RS–DVR system. Aereo, by contrast, has no license. This argument fails, as
the question is whether Aereo's transmissions are public performances of the Plaintiffs' copyrighted works. If so,
Aereo needs a license to make such public performances; if they are not public performances, it needs no such
license. Thus whether Aereo has a license is not relevant to whether its transmissions are public and therefore must
be licensed. This argument by the Plaintiffs also finds no support in the Cablevision opinion. Cablevision did not hold
that Cablevision's RS–DVR transmissions were licensed public performances; rather it held they were not public
performances. It does not appear that the Cablevision court based its decision that Cablevision's RS–DVR
transmissions were non-public transmissions on Cablevision's license to broadcast the programs live. Indeed, such a
conclusion would have been erroneous, because having a license to publicly perform a work in a particular instance,
such as to broadcast a television program live, does not give the licensee the right to perform the work again. That
Cablevision had a license to transmit copyrighted works when they first aired thus should have no bearing on
whether it needed a license to retransmit these programs as part of its RS–DVR system. Indeed, if this interpretation
of Cablevision were correct, Cablevision would not need a license to retransmit programs using video-on-demand
and there would have been no reason for Cablevision to construct an RS–DVR system employing individual copies.
Second, Plaintiffs argue that discrete transmissions should be aggregated to determine whether they are public
performances. This argument has two aspects. Plaintiffs first argue that because Aereo's discrete transmissions
enable members of the public to receive “the same performance (i.e., Aereo's retransmission of a program)” they
are transmissions made “to the public.” Br. of Pls .-Appellants Am. Broad. Cos., et al. at 19. But this is nothing more
than the Cablevision plaintiffs' interpretation of the Transmit Clause, as it equates Aereo's transmissions with the
original broadcast made by the over-the-air network rather than treating Aereo's transmissions as independent
performances. See 536 F.3d at 136. This approach was explicitly rejected by the Cablevision court. See id.
Plaintiffs also argue that the Copyright Act requires that all of Aereo's discrete transmissions “be aggregated and
viewed collectively as constituting a public performance.” Br. of Pls.-Appellants WNET, Thirteen, et al. at 34. This is
not contrary to Cablevision, they argue, because Cablevision only held that transmissions of the same performance
or work made by different entities should not be aggregated. On their view, discrete transmissions of the same
performance or work made by the same entity should be aggregated to determine whether a public performance
has occurred. This argument is also foreclosed by Cablevision. First, Cablevision made clear that the relevant inquiry
under the Transmit Clause is the potential audience of a particular transmission, not the potential audience for the
underlying work or the particular performance of that work being transmitted. See 536 F.3d at 135. But the only
reason to aggregate Aereo's discrete transmissions along the lines suggested by Plaintiffs is that they are discrete
transmissions of the same performance or work. Thus Plaintiffs are asking us to adopt a reading of the Transmit
Clause that is contrary to that adopted by Cablevision because it focuses on the potential audience of the
performance or work being transmitted, not the potential audience of the particular transmission. Second, Plaintiffs
provide no reason why Aereo's multiple, audience-of-one transmissions of unique copies of the same underlying
program should be aggregated but not Cablevision's multiple, audience-of-one transmissions of unique copies of the
same underlying program. Both Aereo and Cablevision are making multiple private transmissions of the same work,
so adopting the Plaintiffs' approach and aggregating all transmissions made by the same entity would require us to
find that both are public performances. While it does not appear that Cablevision explicitly rejected this view,
interpreting the Transmit Clause as the Plaintiffs urge so as to aggregate Aereo's transmissions would, if fairly
applied to the facts of Cablevision, require us to aggregate Cablevision's distinct RS–DVR transmissions. For these
reasons, we cannot accept Plaintiffs' arguments that Aereo's transmissions to a single Aereo user, generated from a
unique copy created at the user's request and only accessible to that user, should be aggregated for the purposes of
determining whether they are public performances.
Plaintiffs' third argument for distinguishing Cablevision is that Cablevision was decided based on an analogy to a
typical VCR, with the RS–DVR simply an upstream version, but Aereo's system is more analogous to a cable
television provider. While it is true that the Cablevision court did compare the RS–DVR system to the stand-alone
VCR, these comparisons occur in the section of that opinion discussing Cablevision's potential liability for infringing
the plaintiffs' reproduction right. See 536 F.3d at 131. No part of Cablevision's analysis of the public performance
right appears to have been influenced by any analogy to the stand-alone VCR. Moreover, this Court has followed
Cablevision's interpretation of the Transmit Clause in the context of internet music downloads. See United States v.
Am. Soc'y of Composers, Authors & Publishers, 627 F.3d 64, 73–76 (2d Cir.2010) (“ASCAP”); see also United States
v. Am. Soc'y of Composers, Authors & Publishers (Application of Cellco P'Ship), 663 F.Supp.2d 363, 371–74
(S.D.N.Y.2009) (following Cablevision's analysis of the Transmit Clause in the context of cellphone ringtones). Thus
we see no support in Cablevision or in this Court's subsequent decisions for the Plaintiffs' argument that
Cablevision's interpretation of the Transmit Clause is confined to technologies similar to the VCR.13
Plaintiffs' fourth argument for distinguishing Cablevision is that Cablevision's RS–DVR copies “broke the continuous
chain of retransmission to the public” in a way that Aereo's copies do not. Br. of Pls.-Appellants Am. Broad. Cos., et
al. at 39. Specifically, they argue that Aereo's copies are merely a device by which Aereo enables its users to watch
nearly live TV, while Cablevision's copies, by contrast, could only serve as the source for a transmission of a program
after the original transmission, that is the live broadcast of the program, had finished. As a result, Aereo's copies
lack the legal significance of Cablevision's RS–DVR copies and are no different from the temporary buffer copies
created by internet streaming, a process that this Court has assumed produces public performances. See, e.g., ivi,
691 F.3d at 278; ASCAP, 627 F.3d at 74.
This argument fails for two reasons. First, Aereo's copies do have the legal significance ascribed to the RS–DVR
copies in Cablevision because the user exercises the same control over their playback. The Aereo user watching a
copy of a recorded program that he requested be created, whether using the “Watch” feature or the “Record”
feature, chooses when and how that copy will be played back. The user may begin watching it nearly live, but then
pause or rewind it, resulting in playback that is no longer concurrent with the program's over-the-air broadcast. Or
the user may elect not to begin watching the program at all until long after it began airing. This volitional control
over how the copy is played makes Aereo's copies unlike the temporary buffer copies generated incident to internet
streaming. A person watching an internet stream chooses the program he wishes to watch and a temporary buffer
copy of that program is then created, which serves as the basis of the images seen by the person watching the
stream. But that person cannot exercise any control over the manner in which that copy is played-it cannot be
paused, rewound, or rewatched later. As a result, the imposition of a temporary buffer copy between the outgoing
stream and the image seen by the person watching it is of no significance, because the person only exercises control
before the copy is created in choosing to watch the program in the first place. By contrast, the Aereo user selects
what program he wishes a copy to be made of and then controls when and how that copy is played.14 This second
layer of control, exercised after the copy has been created, means that Aereo's transmissions from the recorded
copies cannot be regarded as simply one link in a chain of transmission, giving Aereo's copies the same legal
significance as the RS–DVR copies in Cablevision.
Second, Plaintiffs' argument fails to account for Aereo's user-specific antennas. Each user-associated copy of a
program created by Aereo's system is generated from a unique antenna assigned only to the user who requested
that the copy be made. The feed from that antenna is not used to generate multiple copies of each program for
different Aereo users but rather only one copy: the copy that can be watched by the user to whom that antenna is
assigned. Thus even if we were to disregard Aereo's copies, it would still be true that the potential audience of each
of Aereo's transmissions was the single user to whom each antenna was assigned. It is beyond dispute that the
transmission of a broadcast TV program received by an individual's rooftop antenna to the TV in his living room is
private, because only that individual can receive the transmission from that antenna, ensuring that the potential
audience of that transmission is only one person. Plaintiffs have presented no reason why the result should be any
different when that rooftop antenna is rented from Aereo and its signals transmitted over the internet: it remains the
case that only one person can receive that antenna's transmissions.16 Thus even without the creation of user-
associated copies, which under Cablevision means that Aereo's transmissions are not public, there is significant
reason to believe that Aereo's system would not be creating public performances, since the entire chain of
transmission from the time a signal is first received by Aereo to the time it generates an image the Aereo user sees
has a potential audience of only one Aereo customer.
Finally, Plaintiffs argue that holding that Aereo's transmissions are not public performances exalts form over
substance, because the Aereo system is functionally equivalent to a cable television provider. Plaintiffs also make
much of the undisputed fact that Aereo's system was designed around the Cablevision holding, because it creates
essentially identical copies of the same program for every user who wishes to watch it in order to avoid copyright
liability, instead of using a perhaps more efficient design employing shared copies. However, that Aereo was able to
design a system based on Cablevision's holding to provide its users with nearly live television over the internet is an
argument that Cablevision was wrongly decided; it does not provide a basis for distinguishing Cablevision. Moreover,
Aereo is not the first to design systems to avoid copyright liability. The same is likely true of Cablevision, which
created separate user-associated copies of each recorded program for its RS–DVR system instead of using more
efficient shared copies because transmissions generated from the latter would likely be found to infringe copyright
holders' public performance right under the rationale of Redd Horne, 749 F.2d 154. Nor is Aereo alone in designing
its system around Cablevision, as many cloud computing services, such as internet music lockers, discussed further
below, appear to have done the same. See Br. of the Computer & Commc'ns Indus. Ass'n & the Internet Ass'n as
Amicus Curiae at 5–8. Perhaps the application of the Transmit Clause should focus less on the technical details of a
particular system and more on its functionality, but this Court's decisions in Cablevision and NFL, 211 F.3d 10, held
that technical architecture matters.
IV. The Legislative Intent Behind the 1976 Copyright Act
Plaintiffs also contend that the legislative history of the 1976 Copyright Act shows that Aereo's transmissions should
be deemed public performances of the Plaintiffs' copyrighted works. They argue that cable retransmissions are public
performances under the Transmit Clause and Aereo is functionally equivalent to a cable system. However, this
reading of the legislative history is simply incompatible with the conclusions of the Cablevision court.
This view of the legislative history also ignores a contrary strand of the history behind the 1976 Copyright Act.
Congress recognized when it drafted the 1976 Act that its broad definition of “performance” could create unintended
results. The House Report states that under this definition, “any individual is performing whenever he or she plays a
phonorecord embodying the performance or communicates the performance by turning on a receiving set.” House
Report at 63. But because Congress did not wish to require everyone to obtain a license from copyright holders
before they could “perform” the copyrighted works played by their television, Congress was careful to note that a
performance “would not be actionable as an infringement unless it were done ‘publicly,’ as defined in section 101.”
id. “Private” performances are exempted from copyright liability. Id. This limitation also applies to performances
created by a “transmission,” since, as the Cablevision court noted, if Congress intended all transmissions to be public
performances, the Transmit Clause would not have contained the phrase “to the public.”18 Cablevision, 536 F.3d at
135–36.
In the technological environment of 1976, distinguishing between public and private transmissions was simpler than
today. New devices such as RS–DVRs and Slingboxes complicate our analysis, as the transmissions generated by
these devices can be analogized to the paradigmatic example of a “private” transmission: that from a personal roof-
top antenna to a television set in a living room. As much as Aereo's service may resemble a cable system, it also
generates transmissions that closely resemble the private transmissions from these devices. Thus unanticipated
technological developments have created tension between Congress's view that retransmissions of network
programs by cable television systems should be deemed public performances and its intent that some transmissions
be classified as private. Although Aereo may in some respects resemble a cable television system, we cannot
disregard the contrary concerns expressed by Congress in drafting the 1976 Copyright Act. And we certainly cannot
disregard the express language Congress selected in doing so. That language and its legislative history, as
interpreted by this Court in Cablevision, compels the conclusion that Aereo's transmissions are not public
performances.
V. Stare Decisis
Though presented as efforts to distinguish Cablevision, many of Plaintiffs' arguments really urge us to overrule
Cablevision. One panel of this Court, however, “cannot overrule a prior decision of another panel.” Union of
Needletrades, Indus. & Textile Employees, AFL–CIO, CLC v. U.S. I.N.S., 336 F.3d 200, 210 (2d Cir.2003). We are
“bound by the decisions of prior panels until such time as they are overruled either by an en banc panel of our Court
or by the Supreme Court.” United States v. Wilkerson, 361 F.3d 717, 732 (2d Cir.2004). There is an exception when
an intervening Supreme Court decision “casts doubt on our controlling precedent,” Union of Needletrades, 336 F.3d
at 210, but we are unaware of any such decisions that implicate Cablevision. Plaintiffs have provided us with no
adequate basis to distinguish Cablevision from the Aereo system.19 We therefore see no error in the district court's
conclusion that Plaintiffs are unlikely to prevail on the merits.
VI. The Other Preliminary Injunction Factors
We now turn to the remaining preliminary injunction factors. See Salinger, 607 F.3d at 79–80. Because the Plaintiffs
are not likely to prevail on the merits, we consider whether the Plaintiffs have demonstrated “sufficiently serious
questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly
in the plaintiff's favor.” Id. at 79. Given our conclusion that Aereo's service does not infringe Plaintiffs' public
performance right when it transmits a program still airing on broadcast television, we do not believe the Plaintiffs
have demonstrated “sufficiently serious questions going to the merits to make them a fair ground for litigation.” Id.
Moreover, we find no abuse of discretion in the district court's determination that the balance of hardships does not
tip decidedly in the Plaintiffs' favor. The district court reached this decision based on its conclusions (1) that the
Plaintiffs were likely to suffer irreparable harm in the absence of an injunction and (2) that Aereo would suffer
significant hardship if an injunction should issue, since this would likely be the end of its business. See Am. Broad.
Cos., Inc. v. Aereo, 874 F.Supp.2d at 397–403. The parties do not appear to contest the district court's factual
determinations supporting these conclusions and we see no clear error in them. Plaintiffs do argue that any harm
suffered by Aereo should be disregarded in the balance of hardships analysis because Aereo's business is illegal and
“[i]t is axiomatic that an infringer of copyright cannot complain about the loss of ability to offer its infringing
product.” ivi, 691 F.3d at 287. But this argument hinges on the conclusion that Aereo's business infringes the
Plaintiffs' copyrights. Because we conclude that it does not—at least on the limited question before us of whether
Aereo's transmissions of unique copies of recorded programs to the Aereo users who directed that they be created
are public performances—the harms Aereo would suffer from an injunction are legally cognizable and significant.
There is thus no reason to disturb the district court's conclusion that the balance of hardships does not tip
“decidedly” in the Plaintiffs' favor.
CONCLUSION
We conclude that Aereo's transmissions of unique copies of broadcast television programs created at its users'
requests and transmitted while the programs are still airing on broadcast television are not “public performances” of
the Plaintiffs' copyrighted works under Cablevision. As such, Plaintiffs have not demonstrated that they are likely to
prevail on the merits on this claim in their copyright infringement action. Nor have they demonstrated serious
questions as to the merits and a balance of hardships that tips decidedly in their favor. We therefore affirm the order
of the district court denying the Plaintiffs' motion.
I respectfully dissent.
Defendant-appellee Aereo, Inc. (“Aereo”) captures over-the-air broadcasts of television programs and retransmits
them to subscribers by streaming them over the Internet. For a monthly fee, Aereo's customers may “Watch” the
programming “live” (that is, with a seven-second delay) on their computers and other electronic devices, or they
may “Record” the programs for later viewing. Aereo retransmits the programming without the authorization of the
copyright holders and without paying a fee.
The Copyright Act confers upon owners of copyrights in audiovisual works the exclusive right “to perform the
copyrighted work publicly.” 17 U.S.C. § 106(4). This exclusive right includes the right “to transmit or otherwise
communicate a performance ․ to the public, by means of any device or process.” Id. § 101. In my view, by
transmitting (or retransmitting) copyrighted programming to the public without authorization, Aereo is engaging in
copyright infringement in clear violation of the Copyright Act.
Aereo argues that it is not violating the law because its transmissions are not “public” performances; instead, the
argument goes, its transmissions are “private” performances, and a “private performance is not copyright
infringement.” It contends that it is merely providing a “technology platform that enables consumers to use
remotely-located equipment ․ to create, access and view their own unique recorded copies of free over-the-air
broadcast television programming.”
Aereo's “technology platform” is, however, a sham. The system employs thousands of individual dime-sized
antennas, but there is no technologically sound reason to use a multitude of tiny individual antennas rather than one
central antenna; indeed, the system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the
reach of the Copyright Act and to take advantage of a perceived loophole in the law. After capturing the broadcast
signal, Aereo makes a copy of the selected program for each viewer, whether the user chooses to “Watch” now or
“Record” for later. Under Aereo's theory, by using these individual antennas and copies, it may retransmit, for
example, the Super Bowl “live” to 50,000 subscribers and yet, because each subscriber has an individual antenna
and a “unique recorded cop[y]” of the broadcast, these are “private” performances. Of course, the argument makes
no sense. These are very much public performances.
Aereo purports to draw its infringement-avoidance scheme from this Court's decision in Cartoon Network LP v. CSC
Holdings, Inc., 536 F.3d 121 (2d Cir.2008), cert. denied, ––– U.S. ––––, 129 S.Ct. 2890, 174 L.Ed.2d 595 (2009)
(“Cablevision”). But, as discussed below, there are critical differences between Cablevision and this case. Most
significantly, Cablevision involved a cable company that paid statutory licensing and retransmission consent fees for
the content it retransmitted, while Aereo pays no such fees. Moreover, the subscribers in Cablevision already had the
ability to view television programs in real-time through their authorized cable subscriptions, and the remote digital
video recording service at issue there was a supplemental service that allowed subscribers to store that authorized
content for later viewing. In contrast, no part of Aereo's system is authorized. Instead, its storage and time-shifting
functions are an integral part of an unlicensed retransmission service that captures broadcast television programs
and streams them over the Internet.
Aereo is doing precisely what cable companies, satellite television companies, and authorized Internet streaming
companies do—they capture over-the-air broadcasts and retransmit them to customers—except that those entities
are doing it legally, pursuant to statutory or negotiated licenses, for a fee. By accepting Aereo's argument that it
may do so without authorization and without paying a fee, the majority elevates form over substance. Its decision,
in my view, conflicts with the text of the Copyright Act, its legislative history, and our case law.
For these and other reasons discussed more fully below, I would reverse the district court's order denying plaintiffs-
appellants' motion for a preliminary injunction.
DISCUSSION
When interpreting a statute, we must begin with the plain language, giving any undefined terms their ordinary
meaning. See Roberts v. Sea–Land Servs., Inc., ––– U.S. ––––, ––––, 132 S.Ct. 1350, 1356, 182 L.Ed.2d 341
(2012); United States v. Desposito, 704 F.3d 221, 226 (2d Cir.2013). We must “attempt to ascertain how a
reasonable reader would understand the statutory text, considered as a whole.” Pettus v. Morgenthau, 554 F.3d
293, 297 (2d Cir.2009). Where Congress has expressed its intent in “reasonably plain terms, that language must
ordinarily be regarded as conclusive.” Negonsott v. Samuels, 507 U.S. 99, 104, 113 S.Ct. 1119, 122 L.Ed.2d 457
(1993) (internal quotation marks and citation omitted); see Devine v. United States, 202 F.3d 547, 551 (2d
Cir.2000). If we conclude that the text is ambiguous, however, we will look to legislative history and other tools of
statutory interpretation to “dispel this ambiguity.” In re Air Cargo Shipping Servs. Antitrust Litig., 697 F.3d 154, 159
(2d Cir.2012).
I begin, then, by considering the text of the relevant sections of the Copyright Act. To the extent there is any
arguable ambiguity in the statutory language, I next turn to its legislative history. Finally, I conclude with a
discussion of Cablevision as well as other relevant precedents.
A. The Statutory Text
Section 106 of the Copyright Act sets out six exclusive rights held by a copyright owner; these include the right “to
perform the copyrighted work publicly.” 17 U.S.C. § 106(4).
As defined in section 101, “[t]o perform ․ a work ‘publicly’ means,” among other things:
to transmit or otherwise communicate a performance or display of the work ․ to the public, by means of any device
or process, whether the members of the public capable of receiving the performance or display receive it in the
same place or in separate places and at the same time or at different times.
Id. § 101. “To ‘transmit’ a performance” is “to communicate it by any device or process whereby images or sounds
are received beyond the place from which they are sent.” Id. Hence, the use of a device or process to transmit or
communicate copyrighted images or sounds to the public constitutes a public performance, whether members of the
public receive the performance in the same place or in different places, whether at the same time or at different
times.
It is apparent that Aereo's system fits squarely within the plain meaning of the statute. See, e.g., Fox Television
Stations, Inc. v. BarryDriller Content Sys., PLC, No. CV 12–6921, 2012 WL 6784498, at *1–6 (C.D.Cal. Dec.27, 2012)
(holding that a service “technologically analogous” to Aereo's was engaged in public performances). The statute is
broadly worded, as it refers to “any device or process.” 17 U.S.C. § 101 (emphasis added); see also id. (defining
“device” and “process” as “one now known or later developed”). Aereo's system of thousands of antennas and other
equipment clearly is a “device or process.” Using that “device or process,” Aereo receives copyrighted images and
sounds and “transmit[s] or otherwise communicate[s]” them to its subscribers “beyond the place from which they
are sent,” id., that is, “ ‘beyond the place’ of origination,” Columbia Pictures Indus., Inc. v. Prof'l Real Estate
Investors, Inc., 866 F.2d 278, 282 (9th Cir.1989). The “performance or display of the work” is then received by
paying subscribers “in separate places” and “at different times.” 17 U.S.C. § 101.
Even assuming Aereo's system limits the potential audience for each transmission, and even assuming each of its
subscribers receives a unique recorded copy, Aereo still is transmitting the programming “to the public.” Id. Giving
the undefined term “the public” its ordinary meaning, see Kouichi Taniguchi v. Kan Pacific Saipan, Ltd., ––– U.S.
––––, ––––, 132 S.Ct. 1997, 2002, 182 L.Ed.2d 903 (2012), a transmission to anyone other than oneself or an
intimate relation is a communication to a “member[ ] of the public,” because it is not in any sense “private.” See
Webster's II: New Riverside University Dictionary 951 (1994) (defining “public” as “[t]he community or the people as
a group”); see also id. at 936 (defining “private” as, inter alia, “[n]ot public: intimate”). Cf. Cablevision, 536 F.3d at
138 (“[T]he identity of the transmitter ․ [is] germane in determining whether that transmission is made ‘to the
public.’ ”); Ford Motor Co. v. Summit Motor Prods., Inc., 930 F.2d 277, 299–300 (3d Cir.1991) (construing “to the
public” in section 106(3) and concluding that “even one person can be the public”).
What Aereo is doing is not in any sense “private,” as the Super Bowl example discussed above illustrates. This
understanding accords with the statute's instruction that a transmission can be “to the public” even if the “members
of the public capable of receiving the performance. receive it in the same place or in separate places and at the
same time or at different times.” 17 U.S . C. § 101. Because Aereo is transmitting television signals to paying
strangers, all of its transmissions are “to the public,” even if intervening “device[s] or process[es]” limit the potential
audience of each separate transmission to a single “member[ ] of the public.” Id.
By any reasonable construction of the statute, Aereo is engaging in public performances and, therefore, it is
engaging in copyright infringement. See id. §§ 106(4), 501(a).
B. The Legislative History
Even if the language of the transmit clause were ambiguous as applied to Aereo's system, see Cablevision, 536 F.3d
at 136 (“[T]he transmit clause is not a model of clarity ․”), the legislative history reinforces the conclusion that Aereo
is engaging in public performances. The legislative history makes clear that Congress intended to reach new
technologies, like this one, that are designed solely to exploit someone else's copyrighted work.
Just before the passage of the 1976 Copyright Act, the Supreme Court held in Fortnightly Corp. v. United Artists
Television, Inc., 392 U.S. 390, 88 S.Ct. 2084, 20 L.Ed.2d 1176 (1968), and Teleprompter Corp. v. Columbia
Broadcast Systems, Inc., 415 U.S. 394, 94 S.Ct. 1129, 39 L.Ed.2d 415 (1974), that community antenna television
(“CATV”) systems—which captured live television broadcasts with antennas set on hills and retransmitted the signals
to viewers unable to receive the original signals—did not infringe the public performance right because they were
not “performing” the copyrighted work. See Teleprompter, 415 U.S. at 408–09; Fortnightly, 392 U.S. at 399–400. In
reaching this conclusion, the Court reasoned that:
If an individual erected an antenna on a hill, strung a cable to his house, and installed the necessary amplifying
equipment, he would not be ‘performing’ the programs he received on his television set․ The only difference in the
case of CATV is that the antenna system is erected and owned not by its users but by an entrepreneur.
Fortnightly, 392 U.S. at 400. This rationale is nearly identical to the justification advanced by Aereo: each subscriber
could legally use his own antenna, digital video recorder (“DVR”), and Slingbox1 to stream live television to his
computer or other device, and so it makes no legal difference that the system is actually “erected and owned not by
its users but by an entrepreneur .” Id.2
But Congress expressly rejected the outcome reached by the Supreme Court in Fortnightly and Teleprompter. See
Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 709, 104 S.Ct. 2694, 81 L.Ed.2d 580 (1984) (“Congress concluded
that cable operators should be required to pay royalties to the owners of copyrighted programs retransmitted by
their systems on pain of liability for copyright infringement.”); see also WPIX, Inc. v. ivi, Inc., 691 F.3d 275, 281 (2d
Cir.2012); Fox Television Stations, 2012 WL 6784498, at *5. In the 1976 Copyright Act, Congress altered the
definitions of “perform” and “publicly” specifically to render the CATV systems' unlicensed retransmissions illegal. See
Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 469 n. 17, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984);
H.R.Rep. No. 94–1476, at 63, reprinted in 1976 U.S.C.C.A.N. 5659, 5676–77 (“[A] cable television system is
performing when it retransmits the broadcast to its subscribers ․”); id. at 64, reprinted in 1976 U.S.C.C.A.N. at 5678
(“Clause (2) of the definition of ‘publicly’ in section 101 makes clear that the concept[ ] of public performance ․
include[s] ․ acts that transmit or otherwise communicate a performance or display of the work to the public․”).
Congress was not only concerned, however, with the then newly-emerging CATV systems. Recognizing that the
Fortnightly and Teleprompter decisions arose in part because of the “drastic technological change” after the 1909
Act, Fortnightly, 392 U.S. at 396, Congress broadly defined the term “transmit” to ensure that the 1976 Act
anticipated future technological developments:
The definition of ‘transmit’ ․ is broad enough to include all conceivable forms and combinations of wires and wireless
communications media, including but by no means limited to radio and television broadcasting as we know them.
Each and every method by which the images or sounds comprising a performance or display are picked up and
conveyed is a ‘transmission,’ and if the transmission reaches the public in [any] form, the case comes within the
scope of clauses (4) or (5) of section 106.
H.R.Rep. No. 94–1476, at 64, reprinted in 1976 U.S.C.C.A.N. at 5678. Further anticipating that there would be
changes in technology that it could not then foresee, Congress added that a public performance could be received in
different places and at different times. This change was meant to clarify that:
a performance made available by transmission to the public at large is ‘public’ even though the recipients are not
gathered in a single place, and even if there is no proof that any of the potential recipients was operating his
receiving apparatus at the time of the transmission. The same principles apply whenever the potential recipients of
the transmission represent a limited segment of the public, such as the occupants of hotel rooms or the subscribers
of a cable television service.
Id. at 64–65, reprinted at 1976 U.S.C.C.A.N. at 5678 (emphasis added).
While Congress in 1976 might not have envisioned the precise technological innovations employed by Aereo today,
this legislative history surely suggests that Congress could not have intended for such a system to fall outside the
definition of a public performance. To the contrary, Congress made clear its intent to include within the transmit
clause “all conceivable forms and combinations of wires and wireless communications media,” and if, as here, “the
transmission reaches the public in [any] form, the case comes within the scope of clauses (4) or (5) of section 106.”
H.R.Rep. No. 94–1476, at 64, reprinted in 1976 U.S.C.C.A.N. at 5678. Aereo's streaming of television programming
over the Internet is a public performance as Congress intended that concept to be defined.
C. Cablevision
Aereo seeks to avoid the plain language of the Copyright Act and the clear import of its legislative history by relying
on this Court's decision in Cablevision. That reliance, in my view, is misplaced.
Cablevision was a cable operator with a license to retransmit broadcast and cable programming to its paying
subscribers. See Cablevision, 536 F.3d at 123–25; Twentieth Century Fox Film Corp. v. Cablevision Sys. Corp., 478
F.Supp.2d 607, 610 (S.D.N.Y.2007), rev'd sub nom., Cartoon Network LP v. CSC Holdings, Inc. (Cablevision), 536
F.3d 121 (2d Cir.2008). The content providers sought to enjoin Cablevision from introducing a new Remote Storage
DVR system (the “RS–DVR”) that would “allow[ ] Cablevision customers who do not have a stand-alone DVR to
record cable programming” and “then receive playback of those programs through their home television sets.”
Cablevision, 536 F.3d at 124. The lawsuit challenged only whether Cablevision needed additional licenses to allow its
subscribers to record shows and play them back later through the RS–DVR system. See Twentieth Century Fox, 478
F.Supp.2d at 609. If subscribers wanted to watch “live” television, they would watch it through Cablevision's licensed
retransmission feed. See Cablevision, 536 F.3d at 124 (explaining that Cablevision split its programming data stream,
sending one “immediately to customers as before”); Amicus Br. of Cablevision Sys. Corp. at 20.
The RS–DVR worked as follows. Cablevision split its licensed data stream, and sent a stream to a remote server,
where the data went through two buffers. Cablevision, 536 F.3d at 124. At the first buffer, the system made a
temporary copy of 0.1 seconds of programming while it inquired whether any subscribers wanted to copy that
programming. Id. A customer could make such a request “by selecting a program in advance from an on-screen
guide, or by pressing the record button while viewing a given program.” Id. at 125. If a request had been made, the
data moved to the second buffer and then was permanently saved onto a portion of a hard drive designated for that
customer. Id. at 124. At the customer's request, the permanent copy was transmitted to the customer and played
back to him. Id. at 125.
Cablevision held that the RS–DVR did not infringe either the reproduction or the public performance rights. Id. at
140. Unlike the majority here, I do not think we can view Cablevision's analyses of each right in isolation. See
Majority Opin., supra, at 18. As Cablevision explained, “the right of reproduction can reinforce and protect the right
of public performance.” Cablevision, 536 F.3d at 138. “Given this interplay between the various rights in this
context,” id., Cablevision's holding that “copies produced by the RS–DVR system are ‘made’ by the RS–DVR
customer,” id. at 133, was critical to its holding that “each RS–DVR playback transmission ․ made to a single
subscriber using a single unique copy produced by that subscriber ․ [is] not [a] performance[ ] ‘to the public,’ “ id. at
139 (emphasis added); see also Amicus Br. of the United States at 17–19, Cable News Network, Inc. v. CSC
Holdings, Inc., ––– U.S. ––––, 129 S.Ct. 2890, 174 L.Ed.2d 595 (2009), denying cert., Cartoon Network LP v. CSC
Holdings, Inc. (Cablevision), 536 F.3d 121 (2d Cir.2008) [hereinafter “U.S. Cablevision Amicus Br.”].
With this concept in mind, it is clear that Aereo's system is factually distinct from Cablevision's RS–DVR system. First,
Cablevision's RS–DVR system “exist[ed] only to produce a copy” of material that it already had a license to
retransmit to its subscribers, Cablevision, 536 F.3d at 131, but the Aereo system produces copies to enable it to
transmit material to its subscribers. Whereas Cablevision promoted its RS–DVR as a mechanism for recording and
playing back programs, Aereo promotes its service as a means for watching “live” broadcast television on the
Internet and through mobile devices. Unlike Cablevision, however, Aereo has no licenses to retransmit broadcast
television. If a Cablevision subscriber wanted to use her own DVR to record programming provided by Cablevision,
she could do so through Cablevision's licensed transmission. But an Aereo subscriber could not use her own DVR to
lawfully record content received from Aereo because Aereo has no license to retransmit programming; at best, Aereo
could only illegally retransmit public broadcasts from its remote antennas to the user. See, e.g., Fortnightly Corp.,
392 U.S. at 400, overruled by statute as recognized in, Capital Cities Cable, 467 U.S. at 709; ivi, Inc., 691 F.3d at
278–79; see also U.S. Cablevision Amicus Br., supra, at 21 (arguing that the legality of a hypothetical unlicensed
system that only allowed subscribers to copy and playback content “would be suspect at best, because [the
subscriber] would be ․ copying programs that he was not otherwise entitled to view”). Aereo's use of copies is
essential to its ability to retransmit broadcast television signals, while Cablevision's copies were merely an optional
alternative to a set-top DVR. The core of Aereo's business is streaming broadcasts over the Internet in real-time; the
addition of the record function, however, cannot legitimize the unauthorized retransmission of copyrighted content.
Second, subscribers interact with Aereo's system differently from the way Cablevision's subscribers interacted with
the RS–DVR. Cablevision subscribers were already paying for the right to watch television programs, and the RS–
DVR gave them the additional option to “record” the programs. Cablevision, 536 F.3d at 125. In contrast, Aereo
subscribers can choose either “Watch” or “Record.” Am. Broad. Cos. v. AEREO, Inc., 874 F.Supp.2d 373, 377
(S.D.N.Y.2012). Both options initiate the same process: a miniature antenna allocated to that user tunes to the
channel; the television signal is transmitted to a hard drive; and a full-length, permanent copy is saved for that
customer. Id. at 377–79. If the subscriber has opted to “Watch” the program live, the system immediately begins
playing back the user's copy at the same time it is being recorded. Id. Aereo will then automatically delete the saved
copy once the user is done watching the program, unless the subscriber chooses to save it. Id. at 379.
These differences undermine the applicability of Cablevision to Aereo's system. Cablevision found that the RS–DVR
was indistinguishable from a VCR or set-top DVR because Cablevision's system “exist[ed] only to produce a copy”
and its subscribers provided the “volitional conduct” necessary to make a copy by “ordering that system to produce a
copy of a specific program.” Cablevision, 536 F.3d at 131; see also U.S. Cablevision Amicus Br., supra, at 16 (noting
that Cablevision turned on whether RS–DVR was more analogous to set-top DVR or video-on-demand service). The
RS–DVR was not designed to be a substitute for viewing live television broadcasts. Aereo's system, however, was
designed to be precisely that. It does not exist only, or even primarily, to make copies; it exists to stream live
television through the Internet. Its users can choose to “Watch” live television instead of “Record” a program, but
the system begins to produce a full-length copy anyway because, even under its own theory, Aereo cannot legally
retransmit a television signal to them without such a copy.3 Aereo's system is much different than a VCR or DVR—
indeed, as Aereo explains, it is an antenna, a DVR, and a Slingbox rolled into one—and for that reason Cablevision
does not control our decision here.
I note also that in Cablevision this Court “emphasize[d]” that its holding “does not generally permit content delivery
networks to avoid all copyright liability by making copies of each item of content and associating one unique copy
with each subscriber to the network, or by giving their subscribers the capacity to make their own individual copies.”
536 F.3d at 139. Likewise, when the United States opposed the grant of certiorari in Cablevision, it argued that “the
Second Circuit's analysis of the public-performance issue should not be understood to reach ․ other circumstances
beyond those presented.” U.S. Cablevision Amicus Br., supra, at 21.4 Cablevision should not be extended to cover
the circumstances presented in this case. Indeed, it is telling that Aereo declines to offer its subscribers channels
broadcast from New Jersey, even though its antennas are capable of receiving those signals, for fear of being
subject to suit outside the Second Circuit, i.e., outside the reach of Cablevision. Cf. Fox Television Stations, Inc. v.
BarryDriller Content Sys., PLC, No. CV 12–6921, 2012 WL 6784498, at *3–4 (C.D.Cal. Dec.27, 2012) (declining to
follow Cablevision and enjoining an Aereo-like system based on plain meaning of § 101).
Finally, the majority's decision in my view runs afoul of other decisions of this Court. Although the issue was not
even contested, in ivi we recognized that the retransmission of copyrighted television programming by streaming it
live over the Internet constituted a “public performance” in violation of the Copyright Act. 691 F.3d at 278, 286,
287.5 Similarly, in United States v. American Society of Composers, Authors, Publishers (“ASCAP”), where, again, the
issue was not even contested, we observed that the streaming of a song, like the streaming of a “television or radio
broadcast,” is a public performance. 627 F.3d 64, 74 (2d Cir.2010) (but holding in contrast that downloads of music
do not constitute “public performances”);6 accord Infinity Broad. Corp. v. Kirkwood, 150 F.3d 104, 106–07, 111–12
(2d Cir.1998) (holding that device allowing users to access private phone line to listen to public radio broadcasts
infringed right of public performance, in the absence of a defense, and was not fair use).
In ivi, we addressed the need for a preliminary injunction to enjoin ivi from streaming copyrighted works over the
Internet without permission:
Indeed, ivi's actions—streaming copyrighted works without permission-would drastically change the industry, to
plaintiffs' detriment․ The absence of a preliminary injunction would encourage current and prospective
retransmission rights holders, as well as other Internet services, to follow ivi's lead in retransmitting plaintiffs'
copyrighted programming without their consent. The strength of plaintiffs' negotiating platform and business model
would decline. The quantity and quality of efforts put into creating television programming, retransmission and
advertising revenues, distribution models and schedules—all would be adversely affected. These harms would
extend to other copyright holders of television programming. Continued live retransmissions of copyrighted television
programming over the Internet without consent would thus threaten to destabilize the entire industry.
691 F.3d at 286. These concerns apply with equal force here, where Aereo is doing precisely what ivi was enjoined
from doing: streaming copyrighted works over the Internet without permission of the copyright holders. Today's
decision does not merely deny the broadcasters a licensing fee for Aereo's activity; it provides a blueprint for others
to avoid the Copyright Act's licensing regime altogether. See Appellant ABC, Inc. Br. at 10 (citing articles reporting
on the rise of copycat services). Congress could not have intended such a result.

CONCLUSION
Based on the plain meaning of the statute, its legislative history, and our precedent, I conclude that Aereo's
transmission of live public broadcasts over the Internet to paying subscribers are unlicensed transmissions “to the
public.” Hence, these unlicensed transmissions should be enjoined. Cablevision does not require a different result.
Accordingly, I dissent.
DRONEY, Circuit Judge:
Judge CHIN dissents in a separate opinion.
——o0o——
SUPREME COURT OF THE UNITED STATES
3. METRO-GOLDWYN-MAYER STUDIOS INC.
et al. v. GROKSTER, LTD., et al.
1. CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
No. 04—480.Argued March 29, 2005–Decided June 27, 2005
Respondent companies distribute free software that allows computer users to share electronic files through peer-to-
peer networks, so called because the computers communicate directly with each other, not through central servers.
Although such networks can be used to share any type of digital file, recipients of respondents’ software have mostly
used them to share copyrighted music and video files without authorization. Seeking damages and an injunction, a
group of movie studios and other copyright holders (hereinafter MGM) sued respondents for their users’ copyright
infringements, alleging that respondents knowingly and intentionally distributed their software to enable users to
infringe copyrighted works in violation of the Copyright Act.
Discovery revealed that billions of files are shared across peer-to-peer networks each month. Respondents are
aware that users employ their software primarily to download copyrighted files, although the decentralized networks
do not reveal which files are copied, and when. Respondents have sometimes learned about the infringement
directly when users have e-mailed questions regarding copyrighted works, and respondents have replied with
guidance. Respondents are not merely passive recipients of information about infringement. The record is replete
with evidence that when they began to distribute their free software, each of them clearly voiced the objective that
recipients use the software to download copyrighted works and took active steps to encourage infringement. After
the notorious file-sharing service, Napster, was sued by copyright holders for facilitating copyright infringement, both
respondents promoted and marketed themselves as Napster alternatives. They receive no revenue from users, but,
instead, generate income by selling advertising space, then streaming the advertising to their users. As the number
of users increases, advertising opportunities are worth more. There is no evidence that either respondent made an
effort to filter copyrighted material from users’ downloads or otherwise to impede the sharing of copyrighted files.
While acknowledging that respondents’ users had directly infringed MGM’s copyrights, the District Court nonetheless
granted respondents summary judgment as to liability arising from distribution of their software. The Ninth Circuit
affirmed. It read Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, as holding that the distribution
of a commercial product capable of substantial non-infringing uses could not give rise to contributory liability for
infringement unless the distributor had actual knowledge of specific instances of infringement and failed to act on
that knowledge. Because the appeals court found respondents’ software to be capable of substantial non-infringing
uses and because respondents had no actual knowledge of infringement owing to the software’s decentralized
architecture, the court held that they were not liable. It also held that they did not materially contribute to their
users’ infringement because the users themselves searched for, retrieved, and stored the infringing files, with no
involvement by respondents beyond providing the software in the first place. Finally, the court held that respondents
could not be held liable under a vicarious infringement theory because they did not monitor or control the software’s
use, had no agreed-upon right or current ability to supervise its use, and had no independent duty to police
infringement.
Held: One who distributes a device with the object of promoting its use to infringe copyright, as shown by clear
expression or other affirmative steps taken to foster infringement, going beyond mere distribution with knowledge of
third-party action, is liable for the resulting acts of infringement by third parties using the device, regardless of the
device’s lawful uses.
(a) The tension between the competing values of supporting creativity through copyright protection and
promoting technological innovation by limiting infringement liability is the subject of this case. Despite offsetting
considerations, the argument for imposing indirect liability here is powerful, given the number of infringing
downloads that occur daily using respondents’ software. When a widely shared product is used to commit
infringement, it may be impossible to enforce rights in the protected work effectively against all direct infringers, so
that the only practical alternative is to go against the device’s distributor for secondary liability on a theory of
contributory or vicarious infringement. One infringes contributorily by intentionally inducing or encouraging direct
infringement, and infringes vicariously by profiting from direct infringement while declining to exercise the right to
stop or limit it. Although “[t]he Copyright Act does not expressly render anyone liable for [another’s]
infringement,” Sony, 464 U.S., at 434, these secondary liability doctrines emerged from common law principles and
are well established in the law, e.g., id., at 486.
(b) Sony addressed a claim that secondary liability for infringement can arise from the very distribution of a
commercial product. There, copyright holders sued Sony, the manufacturer of videocassette recorders, claiming that
it was contributorily liable for the infringement that occurred when VCR owners taped copyrighted programs. The
evidence showed that the VCR’s principal use was “time-shifting,” i.e., taping a program for later viewing at a more
convenient time, which the Court found to be a fair, noninfringing use. 464 U.S., at 423—424. Moreover, there was
no evidence that Sony had desired to bring about taping in violation of copyright or taken active steps to increase its
profits from unlawful taping. Id., at 438. On those facts, the only conceivable basis for liability was on a theory of
contributory infringement through distribution of a product. Id., at 439. Because the VCR was “capable of
commercially significant non-infringing uses,” the Court held that Sony was not liable. Id., at 442. This theory
reflected patent law’s traditional staple article of commerce doctrine that distribution of a component of a patented
device will not violate the patent if it is suitable for use in other ways. 35 U.S. C §271(c). The doctrine absolves the
equivocal conduct of selling an item with lawful and unlawful uses and limits liability to instances of more acute fault.
In this case, the Ninth Circuit misread Sony to mean that when a product is capable of substantial lawful use, the
producer cannot be held contributorily liable for third parties’ infringing use of it, even when an actual purpose to
cause infringing use is shown, unless the distributors had specific knowledge of infringement at a time when they
contributed to the infringement and failed to act upon that information. Sony did not displace other secondary
liability theories.
 (c) Nothing in Sony requires courts to ignore evidence of intent to promote infringement if such evidence exists.
It was never meant to foreclose rules of fault-based liability derived from the common law. 464 U.S., at 439. Where
evidence goes beyond a product’s characteristics or the knowledge that it may be put to infringing uses, and shows
statements or actions directed to promoting infringement, Sony’s staple-article rule will not preclude liability. At
common law a copyright or patent defendant who “not only expected but invoked [infringing use] by advertisement”
was liable for infringement. Kalem Co. v. Harper Brothers, 222 U.S. 55, 62—63. The rule on inducement of
infringement as developed in the early cases is no different today. Evidence of active steps taken to encourage
direct infringement, such as advertising an infringing use or instructing how to engage in an infringing use, shows an
affirmative intent that the product be used to infringe, and overcomes the law’s reluctance to find liability when a
defendant merely sells a commercial product suitable for some lawful use. A rule that premises liability on
purposeful, culpable expression and conduct does nothing to compromise legitimate commerce or discourage
innovation having a lawful promise.
(d) On the record presented, respondents’ unlawful objective is unmistakable. The classic instance of inducement
is by advertisement or solicitation that broadcasts a message designed to stimulate others to commit violations.
MGM argues persuasively that such a message is shown here. Three features of the evidence of intent are
particularly notable. First, each of the respondents showed itself to be aiming to satisfy a known source of demand
for copyright infringement, the market comprising former Napster users. Respondents’ efforts to supply services to
former Napster users indicate a principal, if not exclusive, intent to bring about infringement. Second, neither
respondent attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their
software. While the Ninth Circuit treated that failure as irrelevant because respondents lacked an independent duty
to monitor their users’ activity, this evidence underscores their intentional facilitation of their users’ infringement.
Third, respondents make money by selling advertising space, then by directing ads to the screens of computers
employing their software. The more their software is used, the more ads are sent out and the greater the
advertising revenue. Since the extent of the software’s use determines the gain to the distributors, the commercial
sense of their enterprise turns on high-volume use, which the record shows is infringing. This evidence alone would
not justify an inference of unlawful intent, but its import is clear in the entire record’s context.
(e) In addition to intent to bring about infringement and distribution of a device suitable for infringing use, the
inducement theory requires evidence of actual infringement by recipients of the device, the software in this case.
There is evidence of such infringement on a gigantic scale. Because substantial evidence supports MGM on all
elements, summary judgment for respondents was error. On remand, reconsideration of MGM’s summary judgment
motion will be in order.
380 F.3d 1154, vacated and remanded.
——o0o——
2. United States Court of Appeals, Second
Circuit.
Geoffrey T. WILLIAMS, Plaintiff-Appellant, v. Michael CRICHTON; Alfred A. Knopf, Inc.; Random
House, Inc.; Universal City Studios, Inc.; MCA, Inc.;  Amblin Entertainment, Inc.;  Steven Spielberg;  
David Koepp, Defendants-Appellees.
1. No. 1233, Docket 94-7951
2. Decided: May 22, 1996
Before OAKES, WINTER and CALABRESI, Circuit Judges.Jerome R. Halperin, New York City (Guy S. Halperin, Kyle
Mallary Halperin, Halperin Klein & Halperin, of counsel), for Plaintiff-Appellant. Richard Dannay, New York City (David
O. Carson, Schwab Goldberg Price & Dannay, of counsel), for Defendants-Appellees.
Geoffrey T. Williams (“Williams”) appeals a summary judgment of the United States District Court for the Southern
District of New York, Lawrence M. McKenna, Judge, entered August 25, 1994, in favor of Appellees Michael Crichton,
Alfred A. Knopf, Inc., Random House, Inc., Universal City Studios, Inc., MCA, Inc., Amblin Entertainment, Inc.,
Steven Spielberg, and David Koepp, on Williams's claim of copyright infringement.  860 F.Supp. 158 (S.D.N.Y.1994).
  Williams asserts that the district court erred in concluding that Williams's works and the Appellees' works were not
substantially similar.   For the reasons set forth below, we affirm the judgment of the district court.
BACKGROUND
This is an action for copyright infringement under the Copyright Act of 1976, as amended, 17 U.S.C. §§ 101 et seq.
(1994), and for an accounting of profits.   Williams claims that the Appellees' novel and movie Jurassic Park
(together, the “Jurassic Park works”) infringe upon children's stories that he authored and copyrighted.   In
reviewing the facts underlying this summary judgment motion, we construe the evidence in the light most favorable
to Williams, the non-moving party.  Delaware & Hudson Ry. Co. v. Consolidated Rail Corp., 902 F.2d 174, 177 (2d
Cir.1990), cert. denied, 500 U.S. 928, 111 S.Ct. 2041, 114 L.Ed.2d 125 (1991).
Between 1985 and 1988, Williams created and published four original copyrighted works of fiction for children:  (1)
Dinosaur World, published in 1985 (“Book I”);  (2) Lost in Dinosaur World, published in 1987 (“Book II”);  (3)
Explorers in Dinosaur World, published in 1988 (“Book III”);  and (4) Saber Tooth:  A Dinosaur World Adventure,
published in 1988 (“Book IV”) (together, “Dinosaur World books”).   Williams or his agent applied for and was issued
a Certificate of Registration by the Register of Copyrights for Book I in December 1988 (registration number TX-1-
966-153);  Book II in August 1993 (TX-3-598-943);  Book III in March 1988 (TX-2-294-611);  and Book IV in
November 1988 (TX-2-541-662).
Each of the four books is an adventure story for children that takes place in “Dinosaur World,” described in
Williams's brief as “an imaginary present day man-made animal park for dinosaurs and other pre-historic animals
where ordinary people․ can, in presumed safety, visit, tour and observe the creatures in a natural but hi-tech
controlled habitat.”   Books I and IV are simple stories of children visiting and touring Dinosaur World.   Williams
concedes that these two books, read alone or together, are not infringed upon by the Jurassic Park works, though
there are a few similarities.1  We will focus, then, on the similarities between Books II and III and the Jurassic Park
works.   As a determination of substantial similarity requires a “detailed examination of the works themselves,”
Walker v. Time Life Films, Inc., 784 F.2d 44, 49 (2d Cir.), cert. denied, 476 U.S. 1159, 106 S.Ct. 2278, 90 L.Ed.2d
721 (1986), we will summarize each work at issue.
Lost in Dinosaur World
Lost in Dinosaur World is thirty pages long.   The story opens with the McDunn family preparing for a trip to
Dinosaur World.   Young Tim is “dressed for adventure,” though his mother reminds him, “[w]e're just going to
Dinosaur World, Tim.   Not to the jungle or someplace dangerous.”   Tim, his sister Mary, and Mr. and Mrs. McDunn
pile into the car and set off for Dinosaur World.
From this opening scene, a mood of adventure and perhaps even danger is created.   Tim brings a survival kit along
with him, and Mr. McDunn comments upon Tim's desire to see the “scariest animal in the park,” the allosaur.   The
setting of Dinosaur World enhances the mood.   It is described as a place with
tall pines rising overhead, along with exotic ferns, ginkgo and monkey puzzle trees; giant pterosaurs and
pteranodons circling in the blue sky, their eerie, high-pitched squeals carrying across the distance; roars, grunts and
growls coming from deep in the forest, made by who-knows-what-kind of wild creatures; rumblings and puffs of grey
smoke and steam curling from the top of a small volcano.
After the family arrives at Dinosaur World, they buy tickets and receive a map and a radio guide that can answer
questions about the animals in the park.   They discuss whether to visit the Nursery or proceed directly to the T-Rex
Express, a train shaped like a tyrannosaurus rex that tours Dinosaur World.   Tim is eager to board the T-Rex
Express, but the other McDunns want to go to the Nursery.   As Tim's father says, “Tim, it won't take but a few
minutes, and I'm sure there'll be plenty of exciting things for you to do today.”   The narration continues: “Little did
Mr. McDunn know how true that was.”
While discussing the day's plans, the family is surprised to see a brachiosaur, “the biggest land animal that ever
lived,” eating leaves from the tops of the trees.   The family then enters the Nursery, a “warm and humid” glass-
roofed building, and views protoceratops hatchlings and eggs.
Next, the McDunns proceed to the T-Rex Express.   Tim purchases a “Supertour” ticket, allowing him to ride the
train through each of the geologic periods in which dinosaurs lived:  the Triassic, Jurassic, and Cretaceous eras.   mystery in the middle of Dinosaur Sea.” By promising to do Wendy's chores for a year, Peter convinces Wendy to let
The rest of the family purchases tickets only for the Triassic era.  “After that Tim would be on his own.   He was
very excited.”
During the trip through the Triassic period, the train passes by the shore of the Dinosaur Sea where it is approached
by a shrieking, twenty-five foot nothosaur.   Several train passengers scream as the nothosaur comes “closer and
closer, until Tim could hear him breathe and see water dripping from his needle-sharp teeth.”   When the nothosaur
suddenly slips back into the sea, Tim is left “a little frightened and wondering how much excitement the rest of the
trip would bring.”
At the end of the Triassic tour, Tim's family disembarks, his father warning:
This is your first trip here, so be very careful not to lose your guide.   Whatever you need to know, just ask.   And
remember, no matter what happens, don't get off the train.
Watching his family disappear from sight, Tim “couldn't help feeling just a little lonesome as he continued his
adventure.”
The tour continues into the Jurassic period.   As Tim leans out the train window to get a better view of several
diplodocus wading in a swamp, he “did something that would change his whole day”:  he knocked the radio guide
out of the window.  “It clattered down the embankment by the side of the tracks and came to rest almost under the
tail of a huge stegosaur․”   Tim climbs out of the train to retrieve the guide, taking the opportunity to touch the
“thick and wrinkled” skin of the stegosaur, that rattled its tail “ominously” at the intrusion, but then continued eating
a plant.
As Tim picks up the guide, he hears the T-Rex Express leave the area without him.  “Without any warning, ․ he was
alone-lost in the middle of Dinosaur World.”   As Tim stands alone on the train tracks, with several dinosaurs staring
at him and distant roars sounding in the distance, the radio guide sputters back to life, and warns “how fast can you
run? ․ you don't want to get caught out here when the allosaur zzz bzzt ssstrt grrx.”   Hearing the warning, Tim
begins to think about the allosaur, an animal “that stood over twenty feet tall, had teeth like steak knives and a
disposition like a bucket of rattlesnakes.”  “[N]ow Dinosaur World seemed mysterious.   Strange.  Perhaps even ․
dangerous.”
Walking on his own, Tim encounters a lost baby parasaurolophus, a duckbill dinosaur.   Tim feeds it, and the
dinosaur follows him through the park.   An allosaur then emerges from the trees and chases Tim and the baby
dinosaur.   Tim “could feel the allosaur's breath hot on his neck.”   Tim and the baby dinosaur escape into the
Dinosaur Sea, just ahead of the allosaur which “was furious at seeing his dinner just out of reach.”
After the baby dinosaur is safely returned to its mother, another roaring dinosaur comes out of the distance:  the T-
Rex Express, returning to take Tim back to his parents.
Explorers in Dinosaur World
Explorers in Dinosaur World, also thirty pages long, is intended for children approximately eleven years old.   The
story centers on two siblings, Peter and Wendy.   Peter, a dinosaur enthusiast, is dismayed when his sister wins a
radio station contest to spend a weekend previewing “Dinosaur World's newest attraction-Pangaea-the island of
him accompany her on the trip.
When they arrive at Dinosaur World, Peter and Wendy are met by their guide for the weekend, Jake DuMel, a
designer of Pangaea.   The trio sets off for the boat dock and Jake explains the tasks of all the uniformed workers
they see on the way:
It takes a lot of people to run a place this big.   Engineers for the T-Rex Express trains, guides for group tours ․
keepers who help in the Nursery feeding the baby dinosaurs, gardeners to take care of all the plants and flowers and
a staff of scientists who spend time studying the animals.
Pangaea, about a half-mile from the mainland, appears “ghostly and mysterious.”   As he loads the boat, Jake
checks the children's gear, including a radio.   Peter tells Wendy, “[w]e need it to call for help if we get into any
trouble.”   Jake adds, “Dinosaur World is full of surprises, not trouble.   Still, you can't be too careful․”
As they cross the Dinosaur Sea, the group is pursued by an elasmosaur, a large, serpent-like creature.   The
elasmosaur arches over the boat, flashing its sharp teeth.   Fortunately, the creature becomes distracted by other
prey, and Peter, Wendy, and Jake escape harm.
After the elasmosaur incident, the boat's engine fails and Jake begins to row the final distance to Pangaea.   species are carnivorous, the most vicious being the tyrannosaurus rex and the velociraptors, medium-sized
Another sea dinosaur, a “terrible” and “massive” kronosaur, threatens the trio, but they are able to lasso a passing
sea turtle that pulls the boat quickly across the water to Pangaea.   The kronosaur roars “in frustration and anger”
as it watches “its breakfast escape.”
On Pangaea, “a world impossibly old and, at the same time, wondrously new,” the group first see an apatosaur
“bigger than a moving van.”   Then, a saltopus “no bigger than a cat” runs by “on its hind legs, bent over, balancing
itself with its long tail.”   After this introduction to the animals of the island, the group walks into the center of the
“breathtakingly beautiful” island.   Jake warns Peter and Wendy about the deinonychus, carnivorous dinosaurs that
“run like the wind, hunt in packs like wolves, are always hungry and have extremely long, sharp claws.”   Jake
reassures them that “there are special fences that keep dangerous dinosaurs from wandering into the areas where
we'll be going.”
After a night camping on the island, during which Jake tells the children many dinosaur tales and the children keep a
watchful eye on the forest beyond the campsite, Jake receives a warning on the portable radio:
[Radio]:  Security reports a break in the perimeter fencing on the east side of the lake.
[Jake]:  How bad is it, Main Base?
[Radio]:  Bad enough.   Tracking computers indicate a pack of deinonychus is on the loose, and Jake ․ they're
heading your way.   Suggest you make for the chopper pad.   We have a bird on its way now.   You should have
plenty of time to make it.   Do you copy?
[Jake]:  We're on our way․   You heard him.   Let's go, kids.
As they rush to the helicopter pad, an ankylosaur, a bony-plated dinosaur with a club-like tail, blocks their path.  
From behind, a pack of deinonychus approaches.   To avoid confrontation, the trio veers into the forest.   As they
watch, the ankylosaur fights off the deinonychus with its powerful tail.   The group then reaches the helicopter pad
and departs from Pangaea.
Jurassic Park, The Novel
Jurassic Park is a 400-page novel written for an adult audience.   As one would expect from its length, it is a
complicated story full of many plot twists.   The basic plot outline is as follows:
Unregulated genetic engineering firms are making leaps and bounds in the field hoping for financial gains.   The
developing technology, however, can have disastrous consequences.   One firm, InGen, suffered some sort of
problem in the genetics work it performed on a remote island off Costa Rica. Though much of the affair has gone
unreported, a few people are willing to reveal the events of the “InGen Incident.”   The tale is the story of Jurassic
Park.
John Hammond, InGen's founder, has attempted to create a dinosaur zoo on the volcanic Isla Nublar, by cloning
dinosaurs using DNA extracted from the remains of blood-gorged mosquitos preserved in amber.   The park, which
is set to open in a year, has fifteen different species of dinosaurs, over two hundred animals in all, in a computer-
controlled environment combining state-of-the-art electronic and biological technologies.   Several of the dinosaur
carnivores that hunt in packs.
Several problems, among them the escape of small procompsognathid dinosaurs to the mainland and the death of
three Isla Nublar workmen killed by velociraptors, have made the investors nervous about the venture's success.  
Hammond is forced to bring a team of specialists to the island to inspect the safety of the zoo.
The inspection team consists of Dr. Alan Grant, a paleontologist, Dr. Ellie Sattler, a paleobotanist, Ian Malcolm, a
mathematician, and Dennis Nedry, a computer scientist.   Malcolm believes in chaos theory, a primary theme of the
novel, which posits that even simple systems engage in complex and highly unpredictable behavior.   He has
insisted since first learning of the dinosaur zoo that such a project would bring nothing but disaster.
On the island, the group first encounters brachiosaurs eating from the tops of trees.   After this innocuous incident,
the group travels to the island's headquarters, where they soon discover some of the zoo's potential problems.   In
the nursery, they learn that the dinosaurs have been genetically engineered not to reproduce.   Yet Grant later finds
in the jungle a velociraptor eggshell fragment, leading him to suspect the dinosaurs have overcome their infertility.  
These fears are confirmed when the group learns that the electronic trackers that monitor the creatures indicate that
there are several more dinosaurs on the island than were placed there by InGen.   Also troubling is Sattler's
discovery of some poisonous plant species on the island.   Finally, the reader learns that Dennis Nedry has become
a spy for Biosyn, a rival genetics firm.   Nedry agrees to steal several dinosaur embryos for Biosyn in exchange for
$1.5 million.   These incidents foreshadow additional problems the island zoo will soon suffer.
Hammond's grandchildren, Tim and Alexis, arrive at the island.   Although Hammond has ostensibly brought his
grandchildren so that they may enjoy a sneak-peek at the dinosaurs, their real function is to convince the investors
that the zoo is safe enough for children and will be extremely lucrative.   The inspection team and the children set
off with a guide to tour the park in automated Toyota Land Cruisers that run on a track.   A pre-recorded program
runs inside the cars, explaining the island's inhabitants to the group as they tour.
The tour progresses until a storm develops.   Surveying the island, the tour guide sees that small velociraptors have
boarded a supply boat leaving for Costa Rica.   The group attempts to warn the boat by radio, but communications
are down.
The reader learns that Nedry has shut down all the communications and security systems on the island in order to
escape undetected with the stolen embryos.   As he rushes to a boat dock, Nedry is caught in the storm and
eventually violently killed by a dilophosaur on the loose.
Meanwhile, the Land Cruisers carrying the inspection team and the children have stalled.   A tyrannosaurus rex
attacks, tossing the children's vehicle over a precipice and mauling Malcolm.   The tour group leader is soon killed by
a baby tyrannosaurus rex, though the children, Grant, and the others manage to escape.
A tyrannosaurus rex chases a stampeding herd of dinosaurs.   Later, the tyrannosaurus rex attacks Grant and the
children as they try to escape by raft on a river, but the creature becomes distracted by other dinosaurs on land and
the raft avoids disaster.   The raft is then dive-bombed by a pterodactyl that nearly flies off with one of the children.
  Eventually, the group makes it back to the headquarters, where Sattler, Hammond, and others are trying to
restore order to the island.   Malcolm also is rescued and brought to headquarters, though he is severely injured.
Because the electric fences that usually separate the dinosaurs have been shut off, the dinosaurs are roaming free
throughout the island.   Velociraptors hunting in packs attack many people, killing some and narrowly missing
others.   The children are attacked by a pack while hiding in the headquarter's cafeteria, but they manage to trick
the velociraptors into entering a giant freezer.   Eventually, some of the attacking velociraptors are killed by poison,
though many more remain in a nest that the surviving group of people attempts to destroy.
During this tumult, time has elapsed and now only an hour remains to contact the supply boat and warn it of its
deadly cargo before it reaches Costa Rica.   Just as the boat is about to reach shore, and with the help of Tim's
computer knowledge, they make contact with the supply boat.   The boat's crew kills the velociraptors.   Grant,
Sattler, the children, and others then contact Costa Rican rescuers.
Malcolm, near death, argues with Hammond that the park was doomed to failure from the beginning.   Hammond
stalks off, and is soon killed and eaten by procompsognathids.   Malcolm also dies, succumbing to his injuries. 2
As Grant, Sattler, the children, and the remaining island survivors escape by Costa Rican National Guard helicopter,
Isla Nublar is bombed and the zoo is destroyed.   An epilogue informs us, however, that some creatures have
reached the mainland and appear to be migrating.
Jurassic Park, the Movie
The movie version of Jurassic Park is just over two hours in length.   Like most film adaptations, it eliminates many
of the novel's details and some scenes are cut, such as the velociraptors on the supply boat.   The chaos theory and
genetic engineering themes of the novel are truncated.   Some material is added, such as the inevitable Hollywood
love interest between Dr. Grant and Dr. Sattler.   The children's ages are reversed, and the sister becomes the more
competent of the two.   Some characters are eliminated or combined, and some character traits, notably those of
Malcolm and Hammond, are softened.   Malcolm and Hammond also have the good fortune to survive in the movie
version.   Hammond concedes at the end of the film that the zoo is a disaster, though the actual destruction of the
island is not depicted in the movie, leaving the audience with a more ambiguous ending.
DISCUSSION
Williams argues that the district court erred in granting summary judgment to the Appellees on the ground that
there is no substantial similarity between the Dinosaur World books and the Jurassic Park works.
Summary judgment is mandated when “there is no genuine issue as to any material fact and ․ the moving party is
entitled to a judgment as a matter of law.”  Fed.R.Civ.P. 56(c).   A court must determine “whether the evidence
presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must
prevail as a matter of law.”   Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2512, 91
L.Ed.2d 202 (1986);  see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265
(1986).   We review de novo the district court's grant of summary judgment in favor of the Appellees.  Arica Inst.,
Inc. v. Palmer, 970 F.2d 1067, 1071 (2d Cir.1992).
 To establish copyright infringement, “two elements must be proven:  (1) ownership of a valid copyright, and (2)
copying of constituent elements of the work that are original.”  Feist Publications, Inc. v. Rural Tel. Serv. Co., 499
U.S. 340, 361, 111 S.Ct. 1282, 1296, 113 L.Ed.2d 358 (1991).   The parties do not dispute that Williams obtained
valid copyrights in the Dinosaur World books.   Therefore, in order to prevail, Williams must show that the Appellees
copied the Dinosaur World books.   In the absence of direct evidence, copying is proven by showing “(a) that the
defendant had access to the copyrighted work and (b) the substantial similarity of protectible material in the two
works.”  Kregos v. Associated Press, 3 F.3d 656, 662 (2d Cir.1993), cert. denied, 510 U.S. 1112, 114 S.Ct. 1056,
127 L.Ed.2d 376 (1994);  Laureyssens v. Idea Group, Inc., 964 F.2d 131, 139-40 (2d Cir.1992).
For purposes of the summary judgment motion, the Appellees have conceded that they had access to Williams's
books.   This case thus turns upon the second part of the test:  whether, in the eyes of the average lay observer,
the Jurassic Park works are substantially similar to the protectible expression in the Dinosaur World books.   See
Fisher-Price, Inc. v. Well-Made Toy Mfg. Corp., 25 F.3d 119, 123 (2d Cir.1994).   If “the similarity concerns only
noncopyrightable elements of plaintiff work,” or “no reasonable trier of fact could find the works substantially
similar,” summary judgment is appropriate.   Walker v. Time Life Films, Inc., 784 F.2d 44, 48 (2d Cir.), cert. denied,
476 U.S. 1159, 106 S.Ct. 2278, 90 L.Ed.2d 721 (1986);  see also Arica Inst., 970 F.2d at 1072.
 It is “a principle fundamental to copyright law” that “a copyright does not protect an idea, but only the expression
of an idea.”   Kregos, 3 F.3d at 663;  Warner Bros. Inc. v. American Broadcasting Cos., 720 F.2d 231, 239-40 (2d
Cir.1983).   Similarly, scenes a faire, sequences of events that “necessarily result from the choice of a setting or
situation,” do not enjoy copyright protection.  Walker, 784 F.2d at 50.   The distinction between an idea and its
expression is an elusive one.   Judge Learned Hand provided the guiding principle to this often impenetrable inquiry
in Nichols v. Universal Pictures Corp., 45 F.2d 119, 121 (2d Cir.1930), cert. denied, 282 U.S. 902, 51 S.Ct. 216, 75
L.Ed. 795 (1931):
Upon any work, ․ a great number of patterns of increasing generality will fit equally well, as more and more of the
incident is left out.   The last may perhaps be no more than the most general statement of what the [work] is
about, and at times might consist only of its title;  but there is a point in this series of abstractions where they are no
longer protected, since otherwise the [author] could prevent the use of his ‘ideas,’ to which, apart from their
expression, his property is never extended.
Professor Chafee further defined the boundary between idea and expression, stating that “protection covers the
‘pattern’ of the work ․ the sequence of events and the development of the interplay of characters.”   Zechariah
Chafee, Reflections on the Law of Copyright, 45 Colum.L.Rev. 503, 513 (1945);  see generally 3 Melville B. Nimmer &
David Nimmer, Nimmer on Copyright § 13.03[A] (1995).
Examples aid us in applying these abstract principles.   In Mattel, Inc. v. Azrak-Hamway Int'l, Inc., 724 F.2d 357,
360 (2d Cir.1983) (per curiam), we found that a 51/212 inch Warlord doll did not infringe upon a 51/212 inch
Masters of the Universe doll because, though the dolls looked remarkably similar, the similarities all were attributable
to the unprotectible idea of “a superhuman muscleman crouching in what since Neanderthal times has been a
traditional fighting pose.”   We found that protectible expression might only arise from the way the two dolls
emphasized the idea, such as by accentuating certain muscle groups instead of others.   Id.
An example of unprotectible scenes a faire can be found in Walker, 784 F.2d at 50, regarding stories of police work
in the Bronx.   We said that “[e]lements such as drunks, prostitutes, vermin and derelict cars would appear in any
realistic work about ․ policemen in the South Bronx,” and thus are unprotectible scenes a faire.   Similarly, “[f]oot
chases and the morale problems of policemen, not to mention the familiar figure of the Irish cop, are venerable and
often-recurring themes of police fiction,” not in and of themselves entitled to copyright protection.   Id.  As the
court said in Berkic v. Crichton, 761 F.2d 1289, 1294 (9th Cir.), cert. denied, 474 U.S. 826, 106 S.Ct. 85, 88 L.Ed.2d
69 (1985), “[t]he common use of such stock ․ merely reminds us that in Hollywood, as in the life of men generally,
there is only rarely anything new under the sun.”
 When we determine that a work contains both protectible and unprotectible elements, we must take care to
inquire only whether “the protectible elements, standing alone, are substantially similar.”  Knitwaves, Inc. v.
Lollytogs Ltd., 71 F.3d 996, 1002 (2d Cir.1995);  see also Fisher-Price, 25 F.3d at 123.   We also must recognize that
dissimilarity between some aspects of the works will not automatically relieve the infringer of liability, for “no copier
may defend the act of plagiarism by pointing out how much of the copy he has not pirated.”  Rogers v. Koons, 960
F.2d 301, 308 (2d Cir.), cert. denied, 506 U.S. 934, 113 S.Ct. 365, 121 L.Ed.2d 278 (1992).   It is only when the
similarities between the protected elements of plaintiff's work and the allegedly infringing work are of “small import
quantitatively or qualitatively” that the defendant will be found innocent of infringement.   Id.;  see also 3 Nimmer
on Copyrights, supra, § 13.03[B][1][a].
 To apply the law to the dispute before us, we examine the similarities in such aspects as the total concept and
feel, theme, characters, plot, sequence, pace, and setting of the Dinosaur World books and the Jurassic Park works.
  See Walker, 784 F.2d at 48;  Berkic, 761 F.2d at 1292;  Reyher v. Children's Television Workshop, 533 F.2d 87, 91
(2d Cir.), cert. denied, 429 U.S. 980, 97 S.Ct. 492, 50 L.Ed.2d 588 (1976);  Green v. Lindsey, 885 F.Supp. 469, 481-
82 (S.D.N.Y.1992), aff'd, 9 F.3d 1537 (2d Cir.1993), cert. denied, 510 U.S. 1202, 114 S.Ct. 1318, 127 L.Ed.2d 667
(1994).   Having reviewed both parties' works in detail, we find that nearly all the similarities between the works
arise from noncopyrightable elements, and thus the district court correctly concluded that the works are not
substantially similar.
 Consideration of the total concept and feel of a work, rather than specific inquiry into plot and character
development, is especially appropriate in an infringement action involving children's works, because children's works
are often less complex than those aimed at an adult audience.  Reyher, 533 F.2d at 91.   Here, the total concept
and feel of the two works differ substantially.   The Jurassic Park works are high-tech horror stories with villainous
characters and gruesome bloodshed.   Books II and III of the Dinosaur World series, by contrast, are adventure
stories and, although suspenseful in places, have happy endings.   The threats and danger in Books II and III do
not arise because of the evils of humans;  rather, the threats exist because of the wild nature of dinosaurs and are
intended to educate children about the behavior of these now-extinct creatures.   The total concept and feel of the
Jurassic Park works is of a world out of control, while Williams's Dinosaur World is well under control.
Turning to specific similarities in the theme, setting, characters, time sequence, plot, and pace, we also find that the
Appellees' works are not substantially similar to the Dinosaur World books.   Any similarity in the theme of the
parties' works relates to the unprotectible idea of a dinosaur zoo.   Once one goes beyond this level of abstraction,
the similarity in themes disappears.   The Jurassic Park works involve genetic engineering, ego, greed, and the
consequences of man's hubris in believing that nature can be controlled.   No similar themes are evident in any of
the Dinosaur World books.
The settings of the parties' works also do not give rise to a finding of substantial similarity.   While both the
Dinosaur World books and the Jurassic Park works share a setting of a dinosaur zoo or adventure park, with
electrified fences, automated tours, dinosaur nurseries, and uniformed workers, these settings are classic scenes a
faire that flow from the uncopyrightable concept of a dinosaur zoo.   Thus, though perhaps substantially similar, the
settings are not protectible.   Williams, however, points to the setting of Book III on the island of Pangaea, a lush
volcanic island not yet open to the public, and argues that this setting is a protectible expression of the dinosaur zoo
idea.   We disagree, finding both that Pangaea and Isla Nublar are distinct from one another (one is a man-made
theme park attraction, the other a remote natural island) and that placing dinosaurs on a prehistoric island far from
the mainland amounts to no more than a scene a faire in a dinosaur adventure story.
Williams contends that the children in Book III, Peter and Wendy, and the children in the Jurassic Park works, Tim
and Alexis, along with the respective guides Jake DuMel and Dr. Grant, are substantially similar.   It is true that both
Peter and Tim are dinosaur enthusiasts, that both groups of children are siblings, and that both guides are
intelligent.   Likewise, we recognize that in both works the characters spend the night in the dinosaur zoo and
escape from dangerous dinosaurs by helicopter through the combined wit of the children and adults.
These similarities, however, do not suggest infringement.   As Judge Learned Hand advised, “the less developed the
characters, the less they can be copyrighted;  that is the penalty an author must bear for marking them too
indistinctly.”  Nichols, 45 F.2d at 121.   Such can be said of Peter, Wendy, and Jake, all of whom are much less
developed than their alleged counterparts.   Setting that aside, however, the characters still do not appear
substantially similar.   When one looks beyond the superficial similarities in the characters, many differences
emerge, including the motivations for the characters' trip to the dinosaur parks, the skills and credentials of the
characters, and their interpersonal relationships.   As a result, we find that no reasonable observer would find
substantial similarity between the characters of the works at issue.
Finally, an examination of the time sequence, pace, and plot of the parties' works reveals no infringement.   Book II
takes place in the space of a day;  Book III, in a twenty-four hour period.   The Jurassic Park works, by contrast,
involve a much longer timeline.   Although the pace of the parties' works are similar, both quickly moving from
scene to scene, we agree with the district court that the pace, without more, does not create an issue of overall
substantial similarity between the works.
The plot, or sequence of events, of the works likewise is not substantially similar.   Although Williams points to
several specific instances of similarity, 3 we agree with the district court that such lists are “inherently subjective and
unreliable,” particularly where “the list emphasizes random similarities scattered throughout the works.”  Litchfield v.
Spielberg, 736 F.2d 1352, 1356 (9th Cir.1984), cert. denied, 470 U.S. 1052, 105 S.Ct. 1753, 84 L.Ed.2d 817 (1985).
  Such a scattershot approach cannot support a finding of substantial similarity because it fails to address the
underlying issue:  whether a lay observer would consider the works as a whole substantially similar to one another.  
See Walker, 784 F.2d at 50;  Burroughs v. Metro-Goldwyn-Mayer, Inc., 683 F.2d 610, 624 (2d Cir.1982).
Additionally, even those scenes that appear similar in their abstract description prove to be quite dissimilar once
examined in any detail.   For example, in both Book III and the Jurassic Park movie, the characters escape deadly,
pack-hunting dinosaurs (deinonychus and velociraptors, respectively) when another dinosaur (an ankylosaur and a
tyrannosaurus rex, respectively) intervenes.   However, the Book III dinosaurs are not purposefully hunting the
human characters as the velociraptors are in the movie.   In Book III, the intervening dinosaur is unsuspecting, non-
threatening, but well-armored, whereas the tyrannosaurus rex in the movie is itself a marauding beast that has
terrorized the characters throughout much of the action.   The final scene of the movie, showing the tyrannosaurus
rex roaring over the fallen velociraptors in the lobby of the island's headquarters, surrounded by a prehistoric
skeleton of a dinosaur and banner that reads “When Dinosaurs Ruled the Earth” symbolizes the theme of man's
hubris and emphasizes that nature cannot be controlled.   An analysis of this scene and others leads us to conclude
that a finding of substantial similarity cannot be supported.
When we consider the combined elements of the Dinosaur World books and compare them to the Jurassic Park
works, we hold that a lay observer would not find substantial similarities between the protectible material of these
works.
We must emphasize one final point.   Williams rightly points out that his books, written for a young audience,
deserve copyright protection as much as works created for an adult audience.   Williams fears that unless he
prevails, children's book authors everywhere will be stripped of the protection of copyright because adult book
authors will be able to point to the greater complexity of their works as evidence that no infringement has occurred.
 We answer Williams's concern in two ways.   First, the copyright law is to be uniformly applied across a variety of
media and audiences;  see, e.g., Smith v. Little, Brown & Co., 245 F.Supp. 451 (S.D.N.Y.1965) (adult-audience work
allegedly infringed by children's work), aff'd, 360 F.2d 928 (2d Cir.1966);  Rogers, 960 F.2d at 308, 312 (photograph
allegedly infringed by sculpture);  Horgan v. Macmillan, Inc., 789 F.2d 157, 162 (2d Cir.1986) (ballet choreography
allegedly infringed by photographs of ballet).   The law takes into account Williams's concern by requiring the lay
observer to focus on similarities rather than differences when evaluating a work.   Only when the similarities are
insubstantial or unprotectible will a claim fail.
Second, Williams's claim fails here largely because the similar parts of the parties' works are unprotectible scenes a
faire or trivial, scattered details.   We know of many stories written for children that are more detailed in
characterization and plot than Williams's books, and likewise can think of several adult novels that are less original.  
The claim would be equally weak if the Jurassic Park works had preceded the Dinosaur World books, and the
Appellees had attempted to sue Williams.   Thus, it is not the distinction between children's books and adult books,
but rather the degree of similarity between these particular dinosaur adventure stories that compels our holding in
this case.
CONCLUSION
For the foregoing reasons, we affirm the district court's grant of summary judgment in favor of the Appellees.
——o0o——
United States Court of Appeals,Second Circuit.
David D. WOODS, Florence L. Woods, Kristine Woods and Benjamin Woods, d/b/a Callicoon Music,
Plaintiffs-Appellees, v. BOURNE CO., Defendant-Appellant, American Society of Composers, Authors
and Publishers, Defendant.
No. 571, Docket 94-7421.
Decided: July 25, 1995
Before:  FEINBERG, CARDAMONE and McLAUGHLIN, Circuit Judges.Robert C. Osterberg, New York City (Abeles Clark
Osterberg and Prager, of counsel), for defendant-appellant. Frederick F. Greenman, New York City (Deutsch
Klagsbrun & Blasband, Alvin Deutsch, David Blasband, of counsel), for plaintiffs-appellees.
This appeal requires us to address conflicting claims to royalties generated by various uses of the song “When the
Red, Red, Robin Comes Bob, Bob, Bobbin' Along” (the Song) during what is known in copyright law as an extended
renewal term.   Plaintiffs, heirs of song composer Harry Woods, and defendant Bourne Co., Woods's music
publisher, both claim the right to receive certain royalties generated during this period.   Essentially, plaintiffs claim
that they are entitled to the royalties because they have exercised their statutory right to terminate the publisher's
interests in the Song pursuant to 17 U.S.C. § 304(c).   Bourne maintains that the royalties belong to it because all
the disputed post-termination uses of the Song are attributable to so-called derivative works, which were prepared
under its authority prior to termination and which therefore do not revert to the author.  17 U.S.C. § 304(c)(6)(A).
The royalties at issue were generated by several different uses of the Song following termination.   These uses
include (1) television performances of movies and television programs that incorporate the Song (hereafter
sometimes referred to collectively as “audiovisual works”);  (2) radio performances of sound recordings of the Song;
 and (3) sales of reprints of published arrangements.   Following a bench trial before Judge Richard Owen in the
United States District Court for the Southern District of New York, judgment was entered in March 1994 granting all
the disputed royalties to plaintiffs-appellees. The opinion of the district court is reported at 841 F. Supp. 118.
The district court essentially reached its determination by analyzing whether any of the musical arrangements of the
Song contained in the movies, television shows, sound recordings and printed arrangements were sufficiently
original to qualify as derivative works.   Finding that, with one minor exception, no version of the Song was
sufficiently original, the district court granted judgment for the plaintiffs.   The district court did not consider it
relevant that some of the disputed royalties were generated by performances of audiovisual works, such as movies
containing the Song, which are conceded to be original enough to qualify as derivative works.
For reasons set forth below, we hold that when a musical arrangement is contained within an audiovisual work
produced under license from a publisher prior to termination, the publisher is entitled to receive royalties from post-
termination performances of the audiovisual work under the terms of pre-termination licenses governing
performance rights.   It is irrelevant to disposition of those royalties whether the musical arrangement in the
audiovisual work would qualify independently as a derivative work.   We reverse the ruling of the district court in
this respect and direct payment of royalties to Bourne for these performances in accordance with the terms of the
licenses governing performance of the Song immediately prior to termination.
Whether a particular musical arrangement prepared under the authority of the publisher is a derivative work is
relevant, however, to most other disputed categories of royalties before us.   We essentially affirm the judgment
with respect to those categories. For reasons set forth below, we affirm in part, reverse in part and remand for
further proceedings consistent with this opinion.
I. Background
A. The Grant
Harry Woods (Woods) wrote the words and music to “When The Red, Red, Robin Comes Bob, Bob, Bobbin' Along” in
1926.   That same year, Woods entered into a Songwriter's Agreement with the publishing company of Irving Berlin,
Inc. (Berlin).   The heirs of Woods, doing business as Callicoon Music (Callicoon), are plaintiffs-appellees in this
matter.   At some point in the 1940s, the Bourne Company (Bourne), defendant-appellant herein, succeeded to
Berlin's interests in the Song.
By the Songwriter's Agreement, Woods transferred to Berlin the original musical composition ․ including the
publishing rights, the performing rights, the rights to use the same for mechanical reproduction, the right to make,
publish and perform any arrangement or adaptation of the same, and all copyrights and the rights to secure
copyrights and extensions and renewals of copyrights in the same, or in any arrangements or adaptations thereof.
In April 1926, Berlin obtained a certificate of registration of copyright for the original unpublished musical
composition.   The copyright certificate indicates that Woods is the author of the words and music.   Berlin also
published a piano-vocal arrangement, and Berlin obtained a certificate of copyright for that arrangement one month
after registering the unpublished Song.   The copyright certificate for the piano-vocal arrangement also names
Woods as the author of the words and music.   Berlin is listed as the copyright owner on both certificates.   The
certificates do not indicate that anyone other than Woods acted as arranger.
B. The Extended Renewal Term
Under the Copyright Act of 1909, in effect at the time of Woods's grant to Berlin, the original term of a copyright
was 28 years, followed by a renewal term of another 28 years.   Pub.L. No. 349, 35 Stat. 1075, § 23 (1909).   Office, naming Woods as the author.   Berlin or Bourne eventually prepared and published approximately 19 other
Thus, the grant from Woods to Berlin in the Songwriter's Agreement, which included renewal rights, was to endure
for up to 56 years, ending in 1982.
The reason for including a renewal term in the Copyright Act was to permit an author who sold the rights in his work
for little consideration, when measured against the work's subsequent success, to enjoy a second opportunity with
more bargaining power to reap the full value of the work.   See 2 Melville B. Nimmer & David Nimmer, Nimmer on
Copyright § 9.02 at 9-28 to 9-29 (1994).1  Thus, Congress attempted to alleviate the problem of the inability of
authors to know the true monetary value of their works prior to commercial exploitation.  Id. at 9-30.   That
purpose, however, was largely eroded by a subsequent Supreme Court decision holding that renewal rights were
assignable along with original term rights in a work.  Fisher Music Co. v. M. Witmark & Sons, 318 U.S. 643, 63 S.Ct.
773, 87 L.Ed. 1055 (1943);  see 2 Nimmer § 9.06 [B] [1] at 9-108.
When the Copyright Act was thoroughly revised in 1976, Pub.L. No. 94-553, 90 Stat. 2541 (1976), Congress
attempted to restore a second chance to authors or their heirs.   Among other changes, Congress prolonged the
duration of copyrights then in the renewal term so that they would continue for an additional 19 years.  17 U.S.C. §  Brothers Publications instead to reprint arrangements of the Song.   Callicoon (or the Harry Fox Agency as
304(b).   At the end of the 28th year of the renewal term, the author (if alive) or the author's surviving spouse or
children may terminate the rights of a grantee, usually a publisher, to whom the author had transferred rights in the
original work.  17 U.S.C. § 304(c)(1)-(3).   During the 19-year extended renewal term, a copyrighted work does not
enter the public domain but continues to generate royalties.   If the author or heirs elect to terminate the publisher's
rights, royalties become payable to them rather than to the publisher.  17 U.S.C. § 304(c)(6).   The author or heirs
thus “recapture” rights in the copyrighted work and may thereby be relieved “of the consequences of ill-advised and
unremunerative grants that had been made before the author had a fair opportunity to appreciate the [work's] true
value.”  Mills Music, Inc. v. Snyder, 469 U.S. 153, 172-73, 105 S.Ct. 638, 649, 83 L.Ed.2d 556 (1985).
There is an important exception to the reversion rights of the author or heirs for derivative works produced by an
authorized party during the original and renewal copyright terms.   The Copyright Act of 1976 provides that
[a] derivative work prepared under authority of the grant before its termination may continue to be utilized under
the terms of the grant after its termination, but this privilege does not extend to the preparation after the
termination of other derivative works based upon the copyrighted work covered by the terminated grant.
17 U.S.C. § 304(c)(6)(A) (referred to hereafter as “the Derivative Works Exception” or simply “the Exception”). The
Act defines a derivative work as a work based upon one or more preexisting works, such as a translation, musical
arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment,
condensation, or any other form in which a work may be recast, transformed, or adapted.   A work consisting of
editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of
authorship, is a “derivative work.”
The renewal term for Bourne's copyright in the Song came to an end in April 1982, and Callicoon terminated
Bourne's rights immediately thereafter.
C. Registration and Commercial Exploitation of the Song
During the original and renewal copyright terms, Berlin, and then its successor Bourne, successfully exploited the
Song for its commercial value.   As already noted, Berlin published a piano-vocal arrangement of the Song in 1926,
shortly after receiving the grant from Woods.   Berlin registered the piano-vocal arrangement with the Copyright
arrangements of the Song for various combinations of voices and musical instruments.   Bourne obtained 16
different registrations of copyright for different arrangements of the Song.   The copyright registrations for these
arrangements indicate that Woods is the author of the words and music.   Other people are listed as arrangers or
authors of new material.   Bourne authorized the Hal Leonard Publishing Company (Leonard) to reprint
arrangements of the Song in assorted sheet music compilations.   Bourne also issued numerous licenses (known as
mechanical licenses), often through its agent, the Harry Fox Agency, to record companies to make sound recordings
of the Song as performed by popular artists.   Bourne also issued licenses (known as synchronization licenses or
synch licenses), frequently through the Harry Fox Agency, to motion picture and television studios to incorporate the
Song in movies and in television programs.
After terminating Bourne's rights in the Song, Callicoon began to commercially exploit the Song.   Bourne claims,
and Callicoon does not dispute, that Callicoon licensed Leonard to reprint published arrangements of the Song
formerly licensed by Bourne, simply changing the copyright notice to read “Callicoon” instead of “Bourne.”   When
Leonard announced that it would continue to pay Bourne the royalties for these reprints, Callicoon licensed Warner
Callicoon's agent) also issued synch licenses for use of the Song in various new television programs.   Callicoon also
granted new synch licenses, similar to an expired license originally issued by Bourne prior to termination, for use of
the Song in an episode of “The Lucy Show.”   Further, Callicoon licensed use of the Song in a television
advertisement for Delta Faucet.
D. Performance Rights
The principal issues in this case concern rights to perform the Song publicly.   Under the Copyright Act, “[t]o
‘perform’ a work means to recite, render, play, dance, or act it, either directly or by means of any device or
process․”  17 U.S.C. § 101.   As relevant here, performances include television broadcasts of the Song as captured
in movies and television programs and radio broadcasts of the Song as captured in sound recordings.
The right to perform a work publicly has been described as “[o]ne of the greatest sources of revenue in the music
industry.”   Sidney Shemel & M. William Krasilovsky, This Business of Music 196 (1990);  see also 2 Nimmer § 8.19
at 8-264.   However, given the ephemeral nature of performance, it is difficult for the owners of this right to monitor
and enforce it.   To facilitate these functions, authors and publishers early in this century established a performing
rights society, the American Society of Composers, Authors and Publishers (ASCAP).   Currently, two other societies,
Broadcast Music, Inc. (BMI) and the Society of European State Authors and Composers (SESAC), carry out similar
functions.   See generally 2 Nimmer at 8-264 to 8-273.   Both Bourne and Callicoon are members of ASCAP.
By becoming members of ASCAP, authors and publishers may transfer to it the public performance rights in their
works.   ASCAP in turn issues licenses to radio stations, television stations, restaurants, stores and other entities that
“perform” music publicly.   Television stations generally obtain blanket licenses from ASCAP that entitle them to
perform any musical composition in ASCAP's extensive catalogue.   In exchange, the stations pay ASCAP a
percentage of their annual gross receipts.   Shemel & Krasilovsky, at 197.
ASCAP surveys all forms of public performance of members' musical compositions in order to determine allocation of
licensing fees.   As between the composer and publisher of a particular composition, ASCAP distributes half of the
collected fees to each, unless the author and publisher indicate otherwise in their contract with each other.   Al Kohn
& Bob Kohn, The Art of Music Licensing 635-36 (1992).
During the original and renewal terms, Bourne received royalties from ASCAP for television broadcasts of movies and
television programs containing the Song and radio broadcasts of the Song.   A typical synch license issued by
Bourne for the production of an audiovisual work required a producer to pay a flat fee but provided that any
broadcast entity performing the Song as contained in the audiovisual work must obtain a performance license from
ASCAP or Bourne.   Thus, for each pre-recorded audiovisual work incorporating the Song, Bourne had two sources
of income:  royalties from the producer for the right to incorporate the Song in the audiovisual work and royalties
from television stations, via ASCAP, for each performance of the Song contained in the work.   Similarly, Bourne
received income from both record producers and, via ASCAP, radio stations performing recordings of the Song.   performances of the Song, including performances contained in pre-termination derivative audiovisual works.   The
However, the licenses Bourne issued to the record producers do not address performance rights, as the audiovisual
synch licenses do.
E. The Parties' Dispute
Public performances of the Song as contained in movies, television programs and sound recordings continue to
generate substantial royalties.   Since Callicoon exercised its termination right in April 1982, Callicoon has continued
to receive from ASCAP the author's 50% share of performance royalties, which share is not disputed.
What is disputed is the publisher's share of royalties for several categories of post-termination public performances
of the Song.   The first category concerns post-termination television broadcasts of audiovisual works produced
under licenses issued by Bourne before termination.   The second category concerns radio performances during the
extended renewal term of the Song through sound recordings that were produced before termination under licenses
issued by Bourne.   Another category concerns post-termination television and radio broadcasts of the Song for
which source material is not identified in ASCAP records.   In a fourth category by itself is a television commercial
for Delta Faucet licensed by Callicoon after termination; according to Bourne, the commercial contains a 1981
Bourne-authorized arrangement of the Song that is a derivative work.
Prior to Callicoon's termination of Bourne's rights, Bourne notified ASCAP of Bourne's contention that it “ ‘continued
to be possessed of the right to receive income from all derivative works retained by it.’ ”   ASCAP then deemed that
a dispute existed between the parties as to rights to publisher's royalties from post-termination performances of the
Song.   In accordance with ASCAP policy, such royalties have been held in escrow pending resolution of the dispute.
  The parties have stipulated that the publisher's share of post-termination royalties withheld by ASCAP from the
fourth quarter of 1982 to the first quarter of 1992 is $85,042.69.   This share is comprised of the following
components:  (1) $27,157.78 from television performances of audiovisual works created before termination;  (2)
$1,058.56 from radio performances of the Song in sound recordings created before termination;  (3) $17,985.28
from television and radio performances for which source materials were not identified in ASCAP records;  and (4)
$38,841.07 from television performances of audiovisual works created after termination (including $13,365.78 from
the Delta Faucet advertisement).   As of October 1, 1992, an additional $32,181 in the escrow account was
attributable to accrued interest and miscellaneous special distributions.
In addition to performance royalties, the parties dispute rights to royalties from sales of reprints of published
arrangements of the Song in sheet music compilations produced and distributed by Leonard and Warner Brothers
during the extended renewal term.
In September 1989, Callicoon filed an amended complaint against Bourne and ASCAP in the district court seeking
principally a declaration that Callicoon is entitled to the publisher's royalties withheld by ASCAP.   Callicoon also
sought a determination of rights to reprint royalties.   The district court held a bench trial in November 1992, and
rendered its decision in January 1994.   Judgment in favor of Callicoon was entered in March 1994.
F. The Decision Below
The district court determined that Callicoon was entitled to all of the royalties generated by post-termination
court acknowledged, and the parties do not dispute, that the works in which the Song was incorporated-for
example, movies-were by definition derivative.   Nevertheless, the court found the controlling issue, as to all
categories of performance, to be whether the underlying arrangement of the Song itself is a derivative work.   Only
then would performance royalties continue to go to Bourne during the extended renewal term.  841 F.Supp. at 120.
  The court then considered whether any of the printed or performed arrangements of the Song were derivative
works.   It found, first, that the original piano-vocal arrangement published by Berlin (Bourne's predecessor in
interest) was not a Berlin-created derivative work.   The court then found that none of the printed or performed
arrangements of the Song, with the exception of one arrangement performed by Fred Waring, could be called a
derivative work.  Id. at 123.
Since Bourne claimed an exception to the general rule in the 1976 Act permitting termination of the publisher's
rights, the court placed the burden on Bourne to identify performances of derivative arrangements.   Since Bourne
offered no evidence of performances of the Fred Waring arrangement, the court held that all of the withheld ASCAP
royalties should be paid to Callicoon.   Id.  The district court also found that none of the printed arrangements
made after the piano-vocal arrangement were derivative works.   Accordingly, it ordered all reprint royalties to be
paid to Callicoon.  Id.
This appeal by Bourne followed.
II. Discussion
The appeal poses two principal issues.   The first is the basis for determining whether a publisher is entitled to
receive royalties for post-termination performances of the Song in pre-termination audiovisual works, such as
movies, that are concededly derivative works.2  As already indicated, the district court found the relevant inquiry to
be whether the arrangement of the Song within a derivative work is itself a derivative work.   We disagree with the
district court in this respect.   Whether the arrangement of the Song is itself a derivative work is not relevant to this
category of royalties.
The derivative work status of an arrangement of the Song, however, is relevant to several other kinds of royalties at
issue in this suit.   These include royalties from performances of pre-termination sound recordings, performances of
post-termination audiovisual works and sales of sheet music reprints.   The second principal issue in this appeal can
be broken into two parts:  whether the district court invoked the correct standard for determining whether
arrangements of the Song are sufficiently original to be derivative works and, if so, whether the court correctly
applied that standard to the facts before it.
A. Royalties from Television Performances
We consider first the basis for determining entitlement to royalties from post-termination performances of the Song
as contained in pre-termination movies and television programs.
The Derivative Works Exception preserves the right of owners of derivative works to continue to exploit their works
during the extended renewal term under previously negotiated terms.   Without such an exception, authors might
use their reversion rights to extract prohibitive fees from owners of successful derivative works or to bring
infringement actions against them.   See Mills Music, 469 U.S. at 172-74, 105 S.Ct. at 649-50 (discussing legislative
history of termination right and Derivative Works Exception);  id. at 183-84 n. 8, 105 S.Ct. at 655 n. 8 (White, J.,
dissenting) (explaining that under the 1909 Act, films had been removed from public circulation during renewal
periods for fear of infringement actions).
The goal of keeping derivative works in public circulation does not require that publishers rather than authors
receive royalties for their use.   As long as the royalties paid by a derivative work user remain unchanged, the user
should be indifferent as to whether an author or publisher receives the payment.   See Mills Music, 469 U.S. at 177,
105 S.Ct. at 652.   The royalties generated during the extended renewal term will be a windfall to either authors
(and their heirs) or publishers since, at the time the rights at issue were originally established, neither group
expected to get royalties for more than 56 years.   The question, therefore, is:  Who is the beneficiary of this
windfall?
1. The Mills Music Decision
The answer, according to the decision of the Supreme Court in Mills Music, Inc. v. Snyder, is found in the phrase
“under the terms of the grant,” as used in the Derivative Works Exception.   We quote its text again for
convenience:
A derivative work prepared under authority of the grant before its termination may continue to be utilized under the
terms of the grant after its termination, but this privilege does not extend to the preparation after the termination of
other derivative works based upon the copyrighted work covered by the terminated grant.
Mills Music posed circumstances similar to those of the instant case.   Snyder, treated for purposes of that case as
the sole author of the song “Who's Sorry Now,” had assigned renewal rights in the song to a publisher, Mills, in 1940
in exchange for, among other things, a 50% share in mechanical royalties, that is, royalties from sales of copies of
sound recordings.3  Mills in turn licensed record companies to produce copies of sound recordings of the song.  
Upon termination of the grant from Snyder to Mills, Snyder's heirs claimed the right to 100%, rather than just 50%,
of future mechanical royalties.  Harry Fox Agency, Inc. v. Mills Music, Inc., 543 F.Supp. 844, 850 (S.D.N.Y.1982),
rev'd, 720 F.2d 733 (2d Cir.1983), rev'd sub nom. Mills Music, Inc. v. Snyder, 469 U.S. 153, 105 S.Ct. 638, 83
L.Ed.2d 556 (1985).   Mills claimed that the sound recordings at issue were derivative works created under the
terms of the grant from Snyder to Mills and that, therefore, Mills should continue to share in mechanical royalties
according to the terms of that grant.  543 F.Supp. at 850.
In the district court, Judge Edward Weinfeld held that the sound recordings produced before termination were
derivative works and that the terms of the grant required payment of mechanical royalties to Mills.   Id. at 852.  
This court reversed, holding that upon termination only the grant from Mills to the record companies remained in
effect.   Since the basis for Mills's retention of half the mechanical royalties was the grant from Snyder, and since
that grant was now terminated, all mechanical royalties should revert to Snyder's heirs.  720 F.2d at 739.
The Supreme Court reversed.   It found that the phrase “terminated grant,” the last two words in the Derivative
Works Exception, must refer to the original grant from author to publisher.   The Court reasoned that the other two
uses of the word “grant” in the single sentence of the Derivative Works Exception must logically refer to the same
grant.  469 U.S. at 164-65, 105 S.Ct. at 645.   The Court noted that “[t]he 1940 grant from Snyder to Mills
expressly gave Mills the authority to license others to make derivative works.”  Id. at 165, 105 S.Ct. at 646.   It then
concluded that “a fair construction of the phrase ‘under the terms of the grant’ as applied to any particular licensee
would necessarily encompass both the [original] grant [from author to publisher] and the individual license [to
record producers] executed pursuant thereto.”  Id. at 166-67, 105 S.Ct. at 646.   Because the combination of the
two grants directed record companies to pay royalties to Mills, and Mills in turn to pay 50% of the amount collected
to Snyder, the Court held that Mills was entitled to retain its 50% share of mechanical royalties on sales of records
produced before termination but sold during the extended renewal term.  Id. at 178, 105 S.Ct. at 652.
Mills Music is, of course, binding upon us.4  Mills Music appears to require that where multiple levels of licenses
govern use of a derivative work, the “terms of the grant” encompass the original grant from author to publisher and
each subsequent grant necessary to enable the particular use at issue.   See Howard B. Abrams, Who's Sorry Now?
  Termination Rights and the Derivative Works Exception, 62 U.Det.L.Rev. 181, 234-35 (1985) (describing holding in
Mills Music as “preserv[ing] the entire paper chain that defines the entire transaction”).   If one of those grants
requires payment of royalties by licensees to an intermediary, such as a publisher, then continued utilization of
derivative works “under the terms of the grant” requires continued payments to the intermediary.   See Mills Music,
469 U.S. at 167, 105 S.Ct. at 646.   The effect of Mills Music, then, is to preserve during the post-termination period
the panoply of contractual obligations that governed pre-termination uses of derivative works by derivative work
owners or their licensees.
2. Applying the Mills Music Decision
The derivative works involved in Mills Music were sound recordings, and the use there was the sale of copies.   The
concededly derivative works we now address are audiovisual works and the use in question is public performance.  
We believe that the reasoning of Mills Music also applies in this situation.
There is no question that the owners of the copyrights in audiovisual works have the right to perform the works
publicly.   They typically exercise this right by licensing television stations to broadcast their works.   In this case,
the terms of the synch licenses issued by Bourne to the producers required the television stations performing the
audiovisual works to obtain a second grant from either Bourne or ASCAP, licensing the stations to perform the Song
contained in the audiovisual works.   In practice, this license is always obtained from ASCAP, which then remits the
publisher's share of fees to Bourne pursuant to the agreement between Bourne and ASCAP.   Under our reading of
Mills Music, the “terms of the grant” include the provisions of the grants from Bourne to ASCAP and from ASCAP to
television stations.   This pair of licenses is contemplated in the grant of the synch licenses from Bourne to film and
television producers.
Callicoon contends that neither the terms of the grants from Bourne to audiovisual work producers nor the terms of
the grant from Bourne to ASCAP identify Bourne as the payee of performance royalties.   By contrast, Callicoon
points out that the mechanical licenses to record companies in Mills Music explicitly named Mills as payee, and the
Supreme Court viewed this fact as dispositive.   Therefore, Callicoon argues, termination in this case “simply
subjects distribution of the royalties to ASCAP's usual procedures, under which, absent any specific direction to the
contrary, royalties are distributed to current copyright owners.”
We do not agree.   The fact that the performance right in the Song is conveyed separately through ASCAP is simply
an accommodation dictated by the practical problem of enforcing performance rights and should not control analysis
of the distribution of performance royalties.   It may be true that no license specifically identifying audiovisual works
containing “Red, Red, Robin” requires payment of performance royalties to Bourne.   However, as explained above,
performance royalties are generally traded “in bulk,” with a publisher granting ASCAP non-exclusive performance
rights in all of its songs, whether contained in derivative works or not.   Television broadcast stations in turn obtain
blanket licenses from ASCAP.   Thus, even if the terms of a grant to perform any single work may be somewhat
obscured by the bulk trading of performance rights, the terms are necessarily contained within the overarching
grants (from Bourne to ASCAP and from ASCAP to the television broadcast stations) and may be reconstructed by
reference to them.   The relevant terms, according to Mills Music, would be those that were in place “at the time of
termination.”  469 U.S. at 174, 105 S.Ct. at 650.
We therefore reverse the decision of the district court as to royalties from post-termination performances of pre-
termination audiovisual works.   On remand, the court should enter judgment ordering defendant ASCAP to pay
these royalties to Bourne in accordance with the terms of the grants in effect immediately prior to the effective date
of Callicoon's termination.
B. Royalties from Sound Recordings and Other Works
The analysis in Part A above, which applies to post-termination performances of pre-termination movies and
television programs, does not apply to certain other post-termination uses of the Song.   The various post-
termination uses which we now consider have little in common except that for each, the question whether the
arrangement of the Song itself is a derivative work is relevant to the allocation of post-termination royalties.
The first category to which we turn is post-termination radio performances of pre-termination sound recordings.   At
first blush, it may seem anomalous that sound recordings should be subject to a different analysis than the
audiovisual works considered above.   Like audiovisual works, sound recordings are clearly derivative works, which
at least for some purposes fall within the Derivative Works Exception.   See generally Mills Music, 469 U.S. 153, 105
S.Ct. 638 (addressing sales of copies of sound recordings).   However, while the Act confers a right of public
performance on the owner of a copyright in an audiovisual work, it specifically denies such a right to the owner of a
copyright in a sound recording.  17 U.S.C. § 114(a);  see generally Agee v. Paramount Communications, Inc., 59
F.3d 317, 321 (2d Cir.1995).   Instead, the right to perform a song contained in a sound recording belongs to the
owner of the copyright in the song.  17 U.S.C. § 106(4);  see Abrams at 235.
The Derivative Works Exception provides for continued utilization of a derivative work.   As the Supreme Court noted
in Mills Music, “The purpose of the Exception was ‘to preserve the right of the owner of a derivative work to exploit
it, notwithstanding reversion.’ ”  469 U.S. at 173, 105 S.Ct. at 650 (quoting statement of Barbara Ringer in Further
Discussions and Comments on Preliminary Draft for Revised U.S. Copyright Law 39, 88th Cong., 2d Sess., Copyright
Law Revision, Part 4 (H.Judiciary Comm.Print 1964)) (emphasis supplied).   Thus, the Exception protects only
authorized uses made by derivative work copyright owners, or their licensees.
Therefore, even though a sound recording is concededly a derivative work, that fact alone does not justify
application of the Derivative Works Exception to performances of sound recordings-as it did with the performances
of audiovisual works discussed in Part A above.   We must still consider, however, whether a different analysis
requires application of the Exception.   Since the owner of the copyright in the Song holds the public performance
right for sound recordings, that right would ordinarily revert to Callicoon during the extended renewal term.  
However, if the particular Song arrangements contained in the sound recordings are themselves Bourne-authorized
derivative works, as Bourne contends, then Bourne should retain the performance right under the Derivative Works
Exception and receive the royalties therefrom.
The same analysis applies to the royalties from the remaining post-termination uses of the Song, since Bourne
argues with respect to all of them that they utilize arrangements of the Song that are Bourne-authorized derivative
works.   These categories of uses are the reprinting and selling of sheet music of pre-termination arrangements, the
performance of a television commercial for Delta Faucet, which was produced after termination, and post-
termination radio and television performances for which ASCAP records do not identify source material.
In the district court and again on appeal, Bourne has argued that all of the pre-termination arrangements prepared
under its authority qualify as derivative works.   This argument stems from the premise that the first published
piano-vocal arrangement of the Song was itself a Bourne-authorized derivative work.   The original grant from
Woods to Berlin, according to Bourne, was just a “lead sheet”-a very simple, hand-written rendering of the lyrics and
melody of the composition without harmonies or other embellishments.   Bourne argues that Berlin modified the
lead sheet by adding harmonies and other elements to create a commercially exploitable piano-vocal arrangement
that qualifies as a derivative work.   Bourne also argues that the 1981 arrangement allegedly used in the Delta
Faucet commercial, as well as all other Bourne-authorized arrangements, were derivative works.   Because only the
first piano-vocal arrangement, the 1981 arrangement and other Bourne-authorized arrangements were ever
commercially exploited, Bourne concludes that any given performance of the Song is “more likely than not” a
performance of a Bourne-authorized derivative work.
The district court rejected both aspects of this argument-that the piano-vocal or any other Bourne-authorized
arrangements were derivative works and that all relevant performances were in fact performances of Bourne-
authorized arrangements.   In finding that the piano-vocal arrangement is not a derivative work, the court relied on
a close reading of the statutory definition of a derivative work and inferences regarding industry practice.  841
F.Supp. at 121.   For convenience, we repeat the Copyright Act's definition of a derivative work as a work based
upon one or more preexisting works, such as a ․ musical arrangement ․ motion picture version, sound recording ․ or
any other form in which a work may be recast, transformed, or adapted.   A work consisting of editorial revisions,
annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a
“derivative work.”
The district court found that the first sentence of that definition, which plainly identifies a “musical arrangement” as
one type of derivative work, must be read in conjunction with the second sentence's requirement of “modifications
which, as a whole, represent an original work of authorship.”  841 F.Supp. at 121.   Therefore, according to the
district court, not every musical arrangement is entitled to derivative work status.   The arrangement must be an
original work of authorship.   The court then asserted that Bourne's claim that Berlin's arrangers somehow exercised
authorship by turning the lead sheet into a commercially exploitable piano-vocal arrangement was “contrary to the
ways of the trade.”  Id.  The court inferred that Woods “doubtless played the song for Berlin when he brought it
into the firm,” id., and that, at the very least, he must have approved the piano-vocal arrangement before it was
published and made available to the public.   The court concluded that, “[a]ccordingly, the very first piano and voice
version that was sold could not possibly be a ‘musical arrangement’ making it a ‘derivative work’ of the lead sheet.”   requirement of novelty, the higher standard usually applied to patents.   E.g., Batlin, 536 F.2d at 490 (“[T]here must
Id.  The court went on to find that none of the printed or (with one minor exception) performed arrangements were
derivative works.  Id. at 122-23.
particularly significant in music cases given that finders of fact often lack musical expertise.”);   1 Nimmer § 2.05[C]
at 2-57 (noting “tendency to require a somewhat greater degree of originality in order to accord copyright in a
musical arrangement”).   But see 1 William F. Patry, Copyright Law and Practice 237 (1994).
Bourne argues that the district court overstated the degree of originality required for an arrangement of a song to
merit derivative work status.   Bourne focuses on the court's statement that “[t]here must be such things as unusual
vocal treatment, additional lyrics of consequence, unusual altered harmonies, novel sequential uses of themes․”  
841 F.Supp. at 121.   We agree that the sentence that Bourne quotes does overstate the standard for derivative
work originality.   As we have observed on several occasions, the requirement of originality is not the same as the
be independent creation, but it need not be invention in the sense of striking uniqueness, ingeniousness, or
novelty․”);  Alfred Bell & Co. v. Catalda Fine Arts, Inc., 191 F.2d 99, 102-03 (2d Cir.1951).   However, we read the
district court's statement as brief dictum within a discussion that otherwise does identify the correct standard.

Earlier in its opinion, the district court correctly cited the statutory definition of a derivative work, which the court
1. The Standard of Originality said required “the ‘modification’ to the composition to be an original work of authorship.”  841 F.Supp. at 121.  
Following its apparent exaggeration of the standard for derivative work originality, the court explained that [there
In order for a work to qualify as a derivative work it must be independently copyrightable.  Weissmann v. Freeman, must be] something of substance added making the piece to some extent a new work with the old song embedded
868 F.2d 1313, 1320-21 (2d Cir.), cert. denied, 493 U.S. 883, 110 S.Ct. 219, 107 L.Ed.2d 172 (1989).   The basis for in it but from which the new has developed.   It is not merely a stylized version of the original song where a major
copyright protection contained in both the constitution and the Copyright Act is originality of authorship.  L. Batlin & artist may take liberties with the lyrics or the tempo, the listener hearing basically the original tune.   It is, in short,
Son, Inc. v. Snyder, 536 F.2d 486, 490 (2d Cir.) (in banc), cert. denied, 429 U.S. 857, 97 S.Ct. 156, 50 L.Ed.2d 135 the addition of such new material as would entitle the creator to a copyright on the new material. Id.
(1976).   While a certificate of copyright registration, such as the one that Berlin obtained for the piano-vocal
arrangement, creates a presumption of copyrightability, the existence of a registration certificate is not dispositive.   This, we believe, is a correct statement of the originality standard as set out in Batlin.   The first and third sentences
Weissmann, 868 F.2d at 1320. simply reiterate Batlin ' s “substantial variation” requirement.   The second sentence, disqualifying “stylized
version[s] of the original song,” as well as the district court's earlier dismissal of “cocktail pianist variations of the
We thoroughly discussed the standard of originality in a derivative work in our in banc decision in Batlin.   There we piece that are standard fare in the music trade by any competent musician,” id., merely express, in terms relevant to
held that “there must be at least some substantial variation [from the underlying work], not merely a trivial the musical context, our explanation in Batlin that “the demonstration of ‘physical skill’ or ‘special training,’ ” 536
variation.”  Batlin, 536 F.2d at 491;  accord Durham Indus., Inc. v. Tomy Corp., 630 F.2d 905, 909 (2d Cir.1980) F.2d at 491, is insufficient to satisfy the requirement of originality.   Because we conclude that the district court
(“[T]o support a copyright the original aspects of a derivative work must be more than trivial.”).   Further, “the articulated the correct standard of originality, we turn to consider the application of the standard to the facts of this
requirement of originality [cannot] be satisfied simply by the demonstration of ‘physical skill’ or ‘special training’․”   case.
Batlin, 536 F.2d at 491;  see also Tempo Music, Inc. v. Famous Music Corp., 838 F.Supp. 162, 170 (S.D.N.Y.1993)
(discussing Batlin ).   Our discussions of the originality standard in recent decisions, such as Weissmann, 868 F.2d at
1321, and Gaste v. Kaiserman, 863 F.2d 1061, 1066 (2d Cir.1988), upon which Bourne relies, do not render the
Batlin standard inapplicable.   See Waldman Publishing Corp. v. Landoll, Inc., 43 F.3d 775, 782 (2d Cir.1994) 2. Application of the Originality Standard
(relying on Batlin as authoritative statement of originality requirement).
To determine whether a work is sufficiently original to be a derivative work, the judge in a bench trial must make
In Batlin we warned that “[t]o extend copyrightability to minuscule variations would simply put a weapon for findings of fact based upon a comparison of two works.   The judge must then apply the legal standard of originality
harassment in the hands of mischievous copiers intent on appropriating and monopolizing public domain work.”  536 to the facts to determine whether the standard has been met.   Although this seems at first blush to be a two-step
F.2d at 492.   At least one other circuit, relying on this court's opinion in Batlin, has advised special caution in process, with review of the factual findings governed by a clearly erroneous standard and the legal conclusion
analyzing originality in derivative works, since too low a threshold will “giv[e] the first [derivative work] creator a subject to de novo review, most courts, including this one, apparently view the process as purely a factual inquiry,
considerable power to interfere with the creation of subsequent derivative works from the same underlying work.”   reviewable for clear error alone.   E.g., Folio Impressions, Inc. v. Byer California, 937 F.2d 759, 763 (2d Cir.1991);  
Gracen v. Bradford Exchange, 698 F.2d 300, 305 (7th Cir.1983).   As the Gracen court explained in discussing the Weissmann v. Freeman, 868 F.2d 1313, 1322 (2d Cir.1989) (citing Fed.R.Civ.P. 52(a));  Financial Information, Inc. v.
originality requirement for a painting derived from a photograph, there must be “sufficiently gross difference Moody's Investors Serv., Inc., 808 F.2d 204, 207 (2d Cir.1986), cert. denied, 484 U.S. 820, 108 S.Ct. 79, 98 L.Ed.2d
between the underlying and the derivative work to avoid entangling subsequent artists depicting the underlying work 42 (1987);  cf. American Geophysical Union v. Texaco, Inc., 37 F.3d 881, 886 (2d Cir.1994), as amended on denial
in copyright problems.”  698 F.2d at 305.   This observation may be particularly relevant in the musical context.   of reh'g (analyzing fair use), petition for cert. filed, 63 U.S.L.W. 3788 (U.S. Apr. 24, 1995) (No. 94-1726);  1 Patry,
While it is easy enough to describe the threshold of originality as being low, it is difficult to translate this standard Copyright Law and Practice 145 n. 106 (cataloguing cases).   Regardless of the applicable standard of review, in the
from one medium to another.   See Tempo Music, 838 F.Supp. at 170 (“[T]he risk of copyright confusion seems instant case we believe that there is adequate support in the record for Judge Owen's determinations.   In other
words, on this aspect of the case we find that the district court did not err-period.   Obviously, therefore, it did not
clearly err.
a. The piano-vocal arrangement
Harry Woods is the sole person identified as author of the words and music on copyright certificates for both the
lead sheet and the piano-vocal arrangement that Berlin obtained in 1926.   No one else is listed as the arranger of
either of these works, but later Bourne-authorized derivative works do list different arrangers.   Although the district
court did not rely heavily on these uncontested facts, we view them as evidence supporting the district court's
conclusion that Woods, not Berlin, composed the Song represented by both the lead sheet and the piano-vocal
arrangement or at least that at the time of the grant, Berlin credited Woods with such authorship.   A reasonable
inference could be made that the piano-vocal arrangement closely approximated the composition conveyed from
Woods to Berlin in 1926.   Thus, regardless of whether the piano-vocal arrangement may be considered original as
compared with the lead sheet, any original creativity that went into producing it was the result of Woods's effort and
occurred before the rights in the composition were granted to Berlin.
This theory, apparently adopted by the district court, is supported by the trial testimony of Beebe Bourne, the
current president of Bourne, Inc. and the daughter of one of Berlin's founders.   She testified to the operating
procedure at Berlin in 1926, stating: a Harry Woods would come in then and in subsequent years and bring in what
we call a lead sheet․   And they would often work at the piano.   Some of the musicians ․ could not even read and
write music as we know it, but had a tremendous ear for sound.   They would come in and it would be reviewed ․ to
determine the merits of it insofar as the commercial salability for those times.
Later she explained that in-house editors, whom she referred to as “technicians,” would “actually write the piano
vocal․”
These statements, that the Berlin employees who physically wrote out the musical notes were “technicians,” and
that the composers “would often work at the piano” when they came in to sell a song, certainly lend additional
support to the district court's view that any act of independent creation distinguishing the lead sheet from the piano-
vocal arrangement was attributable to Woods before he sold the Song to Berlin.  841 F.Supp. at 121 (noting that
Woods “doubtless played the song for Berlin when he brought it into the firm.”).
The scant record evidence thus suggests that the lead sheet and the piano-vocal arrangement were simply two
different renderings of a single composition, the rights in which Woods granted to Berlin.   Upon termination, the
heirs recovered rights in the composition, rendered in both forms, and any subsequent Bourne arrangements that
were not sufficiently original to be considered derivative works.
In addition to finding that the piano-vocal arrangement essentially represents the composition granted from Woods
to Berlin, the district court found that the piano-vocal arrangement is not sufficiently original compared with the lead
sheet to be considered a derivative work.   A side-by-side comparison of the two printed documents quickly reveals
that they are not literally identical.   But it is not readily apparent whether the differences between the two
documents are “substantial.”   At trial, both Callicoon and Bourne presented expert testimony on whether the
differences were “substantial variations” reflecting deliberate aesthetic choices or merely “trivial” changes dictated,
for instance, by applying conventional rules of harmony to the melody in the lead sheet.   The district court was
ultimately persuaded by Callicoon's expert, Thomas Shepard, that the variations in the piano-vocal arrangement
were insubstantial.
We have considered the record before the district court, and we cannot say that on the particular facts before it the
court erred in making this determination.   Accordingly, even if all the disputed performances were based upon the
piano-vocal arrangement, as Bourne contends, this would not compel judgment for Bourne.
Moreover, even if the piano-vocal arrangement could fairly be described as a derivative work, there is little if any
evidence in the record to suggest that the versions of the Song in sound recordings and audiovisual works were
based upon the piano-vocal arrangement.   To the contrary, Callicoon's expert testified that each performance he
had listened to was different.   The only common elements were the words and melody contained in the lead sheet.
  He also stated that arrangers do not always use piano-vocal arrangements in developing subsequent
arrangements;  they often work from memory or from lead sheets.   Therefore, even if the district judge had agreed
with Bourne that the piano-vocal arrangement was a derivative work, the judge need not have concluded that the
performances of the Song were ultimately performances of the piano-vocal arrangement.
b. The 1981 arrangement
A new arrangement of the Song was made under license from Bourne in 1981.   This arrangement is potentially
significant because, according to Bourne, it is this arrangement that is performed in the post-termination Delta
Faucet commercial, which has earned approximately $13,000 in performance royalties.   The district court found
that the 1981 arrangement “in no way exhibits the degree of creativity required to make it a derivative work.”   Id.
at 123.
According to both parties' experts, the principal variation in the 1981 arrangement as compared with the piano-vocal
arrangement concerns the bass line in the piano part.   While the bass line in the first piano-vocal arrangement
consists primarily of quarter notes on the first and third beat of each measure, there is a so-called “moving bass
line” in the 1981 arrangement.
As with the piano-vocal arrangement, we have considered the record before the district court, and we are unable to
conclude that the court erred in finding the 1981 arrangement, which Bourne contends was used in the Delta Faucet
commercial, insufficiently original to be called a derivative work.   Accordingly, Bourne is not entitled to post-
termination royalties from the Delta Faucet commercial.   The judgment of the district court is affirmed to the extent
that it awards royalties from the Delta Faucet commercial to Callicoon.
c. Other printed and performed arrangements
We have reviewed the evidence concerning other recorded and printed arrangements and find that the district court
did not err in its determinations regarding the originality of any of these arrangements.
As we stated above, Bourne would not be entitled to royalties generated by post-termination radio performances of
pre-termination sound recordings unless the arrangements in those recordings were themselves Bourne-authorized
derivative works.   Since we are unable to conclude that the district court erred in finding none of the Bourne-
authorized arrangements (with the exception of one performance by Fred Waring) to be derivative works, we affirm
the judgment of the district court to the extent that it awards Callicoon royalties from post-termination performances
of pre-termination sound recordings.   We also affirm the court's judgment to the extent that it orders Bourne to
remit to Callicoon reprint royalties that Bourne continued to receive after termination.
C. Royalties from Performances Where Source Material was not Identified
We are left with the category of royalties, worth about $18,000, pertaining to radio and television performances
monitored by ASCAP for which source materials were not sufficiently identified.   The district court placed the
burden on Bourne, as the party claiming an exception to the heirs' right of termination to prove that any post-
termination performances were based upon pre-termination derivative arrangements of the Song.  841 F.Supp. at
122 (citing United States v. Allen, 163 U.S. 499, 16 S.Ct. 1071, 41 L.Ed. 242 (1896)).   Finding that Bourne failed to
meet this burden, the court awarded the royalties to Callicoon.
On appeal, Bourne claims that the recapture right and the Derivative Works Exception are two parts of a legislative
compromise, and that the two parts should be placed “on a level playing field.”   On that view, Bourne contends
that the usual rule, requiring a party claiming an exception to bear the burden of proof, does not apply.   Bourne
then argues that because it is “more likely than not” that post-termination performances are performances of
Bourne-authorized derivative works, the burden of proof should in fact be on Callicoon.   In the alternative, Bourne
suggests that royalties from unidentified performances be allocated in proportion to royalties for all identified
performances.
We are unpersuaded by Bourne's argument that the Derivative Works Exception should not be treated like any other
exception to a statutory rule.   It is clear from the statutory scheme that it is indeed an exception to the general rule
of reversion of rights to the author's heirs upon termination, and it was thus described by the Supreme Court in Mills
Music, 469 U.S. at 162, 105 S.Ct. at 644.   Therefore, we hold that the district court properly placed the burden on
Bourne to prove that particular performances were based upon Bourne-authorized derivative works.
Because, as the parties stipulated, the “source materials” for these performances were unidentified, it is impossible
to determine from the record whether the works performed were created before or after termination.   As to the
unidentified television performances, Bourne has introduced no evidence that any of these disputed performances
were of pre-termination audiovisual works, which would entitle it to royalties under the analysis of Part A above.   In
addition, in light of our affirmance of the district court's ruling that virtually none of the Bourne-authorized
arrangements are derivative works, it is not more likely than not that unidentified performances are performances of
Bourne-authorized derivative works.   Thus, the district court did not err in finding that Bourne had failed to satisfy
its burden of proof.   Accordingly, we affirm the judgment to the extent that it awarded Callicoon approximately
$18,000 attributable to post-termination performances of unidentified material.
D. Miscellaneous Issues
The briefs raise two additional issues that should be decided on remand.   First, the parties dispute entitlement to
certain royalties from a musical work, “Freckles,” that allegedly infringed the copyright in the Song.   During the
renewal term, Bourne entered into a settlement agreement with the publisher of “Freckles.”   The district court
apparently determined that Callicoon is entitled to receive royalties from “Freckles” during the extended renewal
term, but the basis of the ruling is not clear in the opinion.   Second, Bourne raises a question concerning an
episode of “The Lucy Show” for which Bourne had issued a synch license in 1973.   The synch license had a five-
year term, and Bourne apparently never renewed the license.   However, during the extended renewal term, in 1988
and again in 1990, Callicoon issued renewal licenses for the same “Lucy Show” episode, for which it received a total
of $1,700.   Bourne now contends that by issuing these renewal licenses Callicoon was encroaching on Bourne's
right to utilize during the extended renewal term derivative works prepared before termination.   In its opinion, the
district court did not address Bourne's contention.   We remand to the district court to decide both the “Freckles”
and “Lucy Show” issues in accordance with the principles set forth in this opinion.
III. Conclusion
To summarize, we hold as follows:  (1) As to performance royalties attributable to pre-termination movies and
television programs, the judgment of the district court is reversed.   The royalties withheld by ASCAP from those
performances should be paid in accordance with the terms of the grant of performance rights from Bourne to ASCAP
and from ASCAP to television stations that existed immediately before termination;  (2) The judgment of the district
court is affirmed as to (a) royalties attributable to radio performances of pre-termination sound recordings, (b)
reprint royalties, (c) the Delta Faucet commercial, and (d) unidentified television and radio performances;  (3) On
remand, the district court should address the “Freckles” and “Lucy Show” issues and enter judgment consistent with
this opinion.
——o0o——
GAMMA AUDIO & VIDEO, INC., et al., Plaintiffs, Appellees, Cross-Appellants, vs. EAN-CHEA d/b/a
Overseas Video, et. al., Defendant, Appellant, Cross-Appellees.
Nos. 92-2016, 92-2132, 93-1504 and 93-1518.
United States Court of Appeals, First Circuit.
Heard Oct. 7, 1993
Decided Dec. 22, 1993
These cross-appeals involve claims of copyright infringement under the Copyright Act of 1976, 17 U.S.C. Sec. 101, et
seq. After a bench trial, judgment was entered in favor of plaintiffs, Gamma Audio & Video, Inc., Taing Tao, Meng I.
Ung and Cheng K. Ung (collectively "Gamma"), on their claim that defendant, Ean-Chea, unlawfully distributed two
videotapes containing four episodes of the Cambodian language version of Jade Fox, a popular Chinese language
soap opera. In addition to obtaining a permanent injunction against Ean-Chea, Gamma was awarded $2,500 in
statutory damages, as well as costs and attorney's fees. Both parties appeal from various aspects of the final
judgment entered below and seek to recover appellate attorney's fees. We affirm the district court on all issues
except one; we reverse the district court's finding that the four episodes of Jade Fox constitute one "work" for
purposes of computing statutory damages. Because we hold that four works were infringed, we vacate the district
court's judgment ordering Ean-Chea to pay Gamma $2,500 for the infringement of only one work, and remand for a
redetermination of damages.
I. BACKGROUND
Television Broadcasts Ltd. ("TVB") is a producer of Chinese language television programs and videotapes of those
programs. The two programs at issue are Jade Fox and Hunters Prey. They consist, respectively, of twenty-four and
twenty one-hour episodes. Both are Chinese language "Kung Fu"-type serials created by TVB in Hong Kong and
originally broadcast there. Although considerably more violent, the programs are of the same genre as American
soap operas. It is unclear whether the episodes were originally broadcast daily or weekly. TVB holds a valid United
States copyright in each of the programs.
Through a series of four recorded licensing agreements, Gamma obtained three exclusive rights with respect to
TVB's programs. Gamma obtained the right to dub TVB videotapes into Cambodian, to duplicate the dubbed
versions, and to distribute by rental the Cambodian versions in thirty-seven states including Massachusetts. Gamma
assigned all copyrights in the dubbed works to its licensor, Telefeature, Inc. At the time this action was commenced,
neither Gamma nor anyone else had registered the copyrights in the derivative works created by Gamma.
Shortly thereafter, Gamma entered into an exclusive licensing agreement with Taing Tao and his partners, the other
individual plaintiffs. The agreement gave them the exclusive right to distribute, by rental to the public, the
Cambodian language videotapes created by Gamma, in six states including Massachusetts. Ean-Chea owns and
operates two video rental stores in Lowell, Massachusetts. The stores are named Overseas Video and Overseas
Video II. Ean-Chea was the authorized distributor of the Cambodian versions of TVB's programs in Massachusetts for
Gamma's predecessor.
On February 9, 1991, Chea Sokhoeun, acting on Gamma's behalf, went to Overseas Video and rented tapes four
through eleven of the Cambodian Jade Fox series. Because each tape contained two episodes, the rented tapes
covered episodes seven through twenty-two.
On June 13, 1991 Gamma commenced this action in the United States District Court for the District of
Massachusetts. The complaint contained six causes of action. Gamma alleged violations of the Copyright Act of
1976, 17 U.S.C. Sec. 101, et seq. (the "Copyright Act") and the Lanham Act, 15 U.S.C. Sec. 1051 et seq. It also
alleged four state-law claims: unfair competition, conversion, tortious interference with advantageous business
relations and a constructive trust. Gamma alleged that Ean-Chea was behind a massive pirating scheme, and
requested millions of dollars in relief.
Together with the complaint, Gamma submitted a one-page document entitled "Motion For Seizure and
Impoundment." By this motion, Gamma sought an ex parte order allowing it "to seize and impound any and all video
tapes which are owned or under the control of the defendants and which are Cambodian language versions of the
TVB programs, produced under the authority of plaintiff Gamma Audio & Video, Inc. including any and all such
videotapes on the premises of the respective stores of defendants." Simultaneously, Gamma moved for a temporary
restraining order and preliminary injunction enjoining Ean-Chea from further acts of infringement and from disposing
any potentially "incriminating" materials such as business records and advertising materials. This motion also asked
that Ean-Chea deliver up ... to be impounded during the pendency of this action, all copies of the Gamma TVB
Programs and all negatives, prints, matrices, master tapes, all business records relating to the sale and/or rental of
video tapes of the Gamma TVB Programs, and all other materials including video recorders, automatic video tape
rewinders, and television monitors (collectively "machines") used in the making of such infringing copies and all
advertising and materials used in the promotion thereof.
Gamma was authorized to visit Ean-Chea's video stores, in the company of a U.S. Marshal or Deputy Sheriff, "for the
purposes of inspection, inventorying, and photographing materials alleged to infringe," and to carry out the
impoundment.
District Judge Mazzone granted the motion for seizure and impoundment and a T.R.O. and ordered Gamma to post a
bond in the amount of $2,500. On June 24, 1991, District Judge Zobel, to whom the case was assigned, heard
argument on Gamma's motion for a preliminary injunction and granted it.
In the meantime, on June 14, the individual plaintiffs and their attorneys, accompanied by a local deputy sheriff,
went to Overseas Video to carry out the seizure and impoundment. The raid yielded nine videotapes containing
episodes three through twenty of Hunters Prey, which were found in a cardboard box behind the front counter,
three high-speed commercial videotape duplicating machines, and a notebook containing business records of
Overseas Video that reflected the shipment to Montreal of an unauthorized copy of a program called Serpentine
Romance.
Six months later, on December 13, 1991, Ean-Chea moved for an order compelling Gamma to return the impounded
video equipment and tapes. On January 13, 1992, Judge Zobel granted the motion, to which no opposition had been
submitted. On January 17, however, Gamma moved for reconsideration; and on February 26 Judge Zobel granted
Gamma's motion for reconsideration and then denied Ean-Chea's motion for return of the impounded material.
On April 28, Gamma elected to recover statutory as opposed to actual damages, on its claim of copyright
infringement. The next day it voluntarily dismissed counts two through six of its complaint, leaving only the
copyright claim to be tried. By this time, Gamma realized that the copyrights in all but four episodes of Jade Fox,
numbers thirteen through sixteen, as well as the copyright in Serpentine Romance had not been registered prior to
the commencement of the lawsuit, and therefore could not support an action seeking statutory damages. These
episodes therefore dropped out of the case, leaving only the four episodes of Jade Fox and the seized videotapes of
Hunters Prey, as subjects of this litigation.
On May 11, 1992, at the close of a four-day bench trial, the trial judge stated her findings of fact. In sum, the court
found that Gamma had established infringement with respect to episodes thirteen through sixteen of Jade Fox, but
had failed to carry its burden of proving infringement with respect to the seized Hunters Prey tapes.
The court then requested additional submissions by counsel for both parties on two issues. First, whether Ean-Chea's
unauthorized distribution of the Cambodian version of four episodes of Jade Fox could support a judgment for
statutory damages. Second, whether each of the four infringed episodes entitled Gamma to a separate award of
statutory damages. The court held that Ean-Chea had wilfully infringed upon Gamma's exclusive right to distribute
the video images of the Chinese language version of Jade Fox in Massachusetts, and that Gamma could therefore
recover statutory damages. It then found that Gamma could recover only one award of statutory damages for the
infringement.
Meanwhile, on June 8, 1992, Ean-Chea had moved for the return of its high-speed duplicating machines and
notebook, and for payment of the $2,500 bond posted by Gamma. On July 3 the court ordered that the materials be
returned, but declined to order payment of the bond.1 On July 15 Gamma moved for costs under the Copyright Act,
including attorney's fees, and on December 12, 1992, Ean-Chea cross-moved for attorney's fees.
In an opinion dated April 2, 1993, the district court ruled upon Gamma's motion for costs and attorney's fees, and
Ean-Chea's cross-motion for attorney's fees. The court awarded Gamma its costs and determined that Gamma, as
the "prevailing party," was eligible for an award of attorney's fees. It also found that Gamma was entitled to a fee
award because Ean-Chea was a willful infringer. The court denied Ean-Chea's cross-motion for fees. These appeals
ensued.
II. DISCUSSION
On their respective appeals each party makes several arguments. Ean-Chea maintains that: (1) as a matter of law,
Gamma could not obtain a judgment for statutory damages because the copyrights in the Cambodian language
episodes of Jade Fox were not registered; (2) Gamma violated Ean-Chea's rights guaranteed by the Fourth
Amendment in its search of the premises of Overseas Video; (3) there was a lack of statutory authority for seizing
the duplicating machines and notebook; and (4) the district court erred in finding Gamma to be the "prevailing
party" under the Copyright Act, and that Ean-Chea was in fact the prevailing party.
On its cross-appeal, Gamma contends that: (1) the district court erred in finding that Ean-Chea had not unlawfully
copied the Hunters Prey videotapes; (2) the district court erred in limiting Gamma to a single award of statutory
damages; and (3) the district court abused its discretion in determining Gamma's attorney's fees award.
We review the district court's findings of fact for clear error, and its conclusions of law de novo. See Lenn v. Portland
Sch. Comm., 998 F.2d 1083, 1087 (1st Cir.1993). Mixed questions of law and fact are also reviewed under a clearly
erroneous standard. I.C.C. v. Holmes Transp., Inc., 983 F.2d 1122, 1128 (1st Cir.1993).
A. Ean-Chea's Appeal
As its first ground on appeal Ean-Chea argues that Gamma could not obtain a judgment for statutory damages with
respect to the unlawful distribution of episodes thirteen through sixteen of the Cambodian language version of Jade
Fox because the copyrights in those episodes were not registered. Gamma argues that Ean-Chea infringed upon the
registered copyrights in the registered Chinese language version of those episodes, and that it could enforce those
copyrights. The questions before this court are twofold: (1) did Ean-Chea infringe upon rights that flow from the
copyrights in the Chinese language version of Jade Fox; and (2) could Gamma enforce those rights.
As the district court recognized, two sets of copyrights are at issue in this litigation, those in the underlying works--
the Chinese language episodes of Jade Fox, and those in the derivative works2 created by Gamma--the Cambodian
language episodes of Jade Fox. See 17 U.S.C. Sec. 102(a) ("[c]opyright protection subsists ... in original works ...
fixed in any tangible medium of expression ... from which they can be reproduced"); 17 U.S.C. Sec. 103(b)
(derivative works are separately copyrightable).
Gamma owns the copyrights in the derivative works, and TVB owns the copyrights in the underlying works. Any of
the exclusive rights comprised in a copyright may be transferred in whole or in part. See 17 U.S.C. Sec. 201(d)(1).
By virtue of the licensing agreements, Gamma obtained certain exclusive rights emanating from the copyrights in the
underlying works. Thus, Gamma owns exclusive rights flowing from both sets of copyrights.
It is undisputed, however, that the copyrights in Gamma's derivative works are unregistered. Accordingly, Gamma
cannot recover statutory damages, the only remedy it sought, for the infringement of its exclusive rights arising
under these unregistered copyrights.3 Instead, Gamma may only recover statutory damages if Ean-Chea's
unauthorized rental of the Jade Fox videotapes infringed upon exclusive rights held by Gamma pursuant to the
registered copyrights in the underlying works.
Ean-Chea maintains that it only infringed upon rights held by Gamma arising out of the unregistered copyrights in
the derivative works. We disagree.
Although a derivative work may be separately copyrighted, that copyright does not affect the copyright in the
underlying work. The statute provides that [t]he copyright in a ... derivative work extends only to the material
contributed by the author of such work, as distinguished from the preexisting material employed in the work, and
does not imply any exclusive right in the pre-existing material. The copyright in such a work is independent of, and
does not affect ... any copyright protection in the pre-existing material.
17 U.S.C. Sec. 103(b) (emphasis added); see 1 Nimmer, Sec. 3.04[A], at 3-17 to -18 (1993). Thus the copyright in a
derivative work only protects the original elements contributed by the author of the derivative work, in this case the
Cambodian language soundtrack created by Gamma. Any elements that the author of the derivative work borrowed
from the underlying work, such as the video images in the Chinese language episodes of Jade Fox, remain protected
by the copyrights in the underlying work. We are led inexorably to the conclusion that Ean-Chea infringed upon
copyrights in the underlying works by renting out episodes of the Cambodian version of Jade Fox which contained
video images protected by the registered copyrights in the Chinese version of Jade Fox. Next we determine whether
Gamma may recover for this infringement.
Under the Copyright Act, the copyright owner of a derivative work "has a cause of action for infringement by reason
of the substantial copying from the derivative work of material which originally appeared in the underlying work." 1
Nimmer Sec. 3.05, at 3-30. This means that, if the copyright owner in a derivative work is the exclusive licensee of
certain rights in the underlying work, it becomes the copyright owner of the underlying work for the purpose of
exercising those rights. Id.; 17 U.S.C. Sec. 201(d)(2) (transferee of any exclusive right is entitled "to all of the
protection and remedies accorded to the copyright owner").
In the present case, Gamma is the exclusive licensee of the right to distribute, in Massachusetts, the video images of
the Chinese production of Jade Fox, in conjunction with a Cambodian language soundtrack. See 17 U.S.C. Sec. 106
(exclusive rights include rights to copy the work, prepare derivative works, and distribute the work to the public by
rental, sale or lease). Accordingly, Gamma may recover for Ean-Chea's infringement. 17 U.S.C. Sec. 501(b) ("[t]he
legal or beneficial owner of an exclusive right under a copyright is entitled ... to institute an action for any
infringement of that particular right committed while he or she is the owner of it"). It is irrelevant that what was
actually distributed by Ean-Chea was the derivative and not the underlying work. See 1 Nimmer Sec. 3.05, at 3-31;
see also G. Ricordi & Co. v. Paramount Pictures, Inc., 189 F.2d 469 (2d Cir.), cert. denied, 342 U.S. 849, 72 S.Ct. 77,
96 L.Ed. 641 (1951) (performance of play in which copyright registration had expired constituted infringement of the
registered copyright in the underlying story from which play was derived); Grove Press, Inc. v. Greenleaf Publishing
Co., 247 F.Supp. 518 (E.D.N.Y.1965) (copying of unregistered English language translation of French language novel
infringed upon the registered copyright in the underlying French language story).
Taking a somewhat scattershot approach to brief writing, Ean-Chea identifies a host of infirmities with respect to the
seizure and impoundment order obtained and executed by Gamma at the outset of this litigation. Ean-Chea appears
to argue that: (1) in executing the orders signed by Judge Mazzone, Gamma violated Ean-Chea's Fourth Amendment
right to be free from unreasonable searches and seizures; (2) Sec. 503(a) of the Copyright Act does not authorize
the seizure of videotape duplicating machines; (3) Sec. 509 does not authorize the seizure of books and records
(i.e., Ean-Chea's notebook); and (4) although Sec. 509 authorizes the seizure of videotape duplicating machines,
Gamma failed to follow the procedures set forth therein.
Ean-Chea has, generously speaking, provided a superficial briefing of the above issues, often dedicating no more
then three or four conclusory sentences to a topic before moving on. For this and other reasons we reject all of the
above contentions.
First we confront Ean-Chea's constitutional claim arising under the Fourth Amendment. While there appears to be
some support for the substance of this argument, see Paramount Pictures Corp. v. Doe, 821 F.Supp. 82, 90-91
(E.D.N.Y.1993) (proposed seizure and impoundment order in copyright case must specify with particularity the
premises to be searched and the articles to be seized or run afoul of Fourth Amendment), Ean-Chea failed to present
this argument to the district court and is thus precluded from raising it on appeal. See McCoy v. Massachusetts
Institute of Technology, 950 F.2d 13, 22 (1st Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 1939, 118 L.Ed.2d 545
(1992) ("theories not raised squarely in the district court cannot be surfaced for the first time on appeal").
The next argument raised by Ean-Chea, which implicates the scope of Sec. 503(a)4, was not presented at oral
argument, takes up a mere handful of sentences in its brief, and is wholly unaccompanied by any developed
argumentation. We have consistently admonished litigants that they cannot simply present this court with a
shopping list of arguments and then expect us to both develop and address each one. Ean-Chea's argument with
respect to Sec. 503(a) is presented in such a cursory and mechanical fashion as to render it unpreserved on appeal.
See, e.g., Cohen v. Brown Univ., 991 F.2d 888, 903 (1st Cir.1993) ("Litigants cannot preserve an issue for appeal by
raising a pennant and then moving on to another subject"); Ryan v. Royal Ins. Co. of America, 916 F.2d 731, 734
(1st Cir.1990) ("issues adverted to on appeal in a perfunctory manner, unaccompanied by some developed
argumentation, are deemed to have been abandoned").
Ean-Chea's argument premised upon Sec. 509 is off base. Although he spends a considerable amount of space on
this point, Ean-Chea fails to realize that Sec. 509 has no bearing on the matter before us. Section 509(a) provides a
list of articles that may be seized and forfeited to the United States in criminal prosecutions brought to enforce
violations of the Copyright Act. The procedures referred to by Ean-Chea, set forth in Sec. 509(b), apply only to
seizures and forfeitures described by subsection (a) of Sec. 509. See 17 U.S.C. Sec. 509(b). Because Sec. 509 is
limited to criminal actions, it is of no use to Ean-Chea in the present case.
Next, Ean-Chea appeals the attorney's fees component of the district court's judgment. The focus of Ean-Chea's
discontent with the fee allowance in the present case is that the district court determined that Gamma and not he
was the "prevailing party" below.
Section 505 of the Copyright Act provides as follows:
In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any
party.... [T]he court may also award a reasonable attorney's fee to the prevailing party as part of the costs.
17 U.S.C. Sec. 505. "Under the Copyright Act, the 'prevailing party is one who succeeds on a significant issue in the
litigation that achieves some of the benefits the party sought in bringing the suit.' " Video Views, Inc. v. Studio 21,
Ltd., 925 F.2d 1010, 1022 (7th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 181, 116 L.Ed.2d 143 (1991) (quoting
Warner Bros., Inc. v. Dae Rim Trading, Inc., 877 F.2d 1120, 1126 (2d Cir.1989) (citation omitted)).
We review de novo the district court's determination that Gamma met the "prevailing party" test. Domegan v. Ponte,
972 F.2d 401, 406 (1st Cir.1992), vacated on other grounds, --- U.S. ----, 113 S.Ct. 1378, 122 L.Ed.2d 754 (1993)
(citing cases). Although prevailing party determinations are often reviewed under an abuse of discretion standard,
see McDonald v. Secretary of Health and Human Services, 884 F.2d 1468, 1474 (1st Cir.1989), such is not the case
where, as here, no facts are in dispute and application of the "prevailing party" test presents a pure question of law
warranting plenary review. Domegan, 972 F.2d at 406-07 n. 8.
Ean-Chea argues that Gamma did not "prevail" because, prior to trial, it voluntarily dismissed the five non-copyright
claims contained in the complaint, conceded that it was not entitled to statutory damages on twelve episodes of
Jade Fox whose copyrights had not been registered prior to the commencement of this action, and failed to prove
infringement with respect to the Hunters Prey videotapes. Although all of this is true, Gamma did succeed on its
infringement claim with respect to episodes thirteen through sixteen of Jade Fox. While we recognize that Gamma
downscaled its case as the litigation proceeded, in light of its victory vis-a-vis the four episodes of Jade Fox, we have
little trouble in concluding that Gamma succeeded on a "significant issue in the litigation." See Langton v. Johnston,
928 F.2d 1206, 1226 (1st Cir.1991) (significance must be viewed in light of "the scope and tenor of the litigation as
a whole").
Furthermore, by virtue of its success, Gamma was awarded $2,500 in statutory damages, and Ean-Chea was
permanently enjoined from further acts of infringement. This restriction on Ean-Chea's future behavior marks a clear
change in the legal relationship between the parties enuring to Gamma's benefit. In addition, the monetary
judgment recovered by Gamma on the merits of its claim is more than sufficient to qualify it as a "prevailing party."
See, e.g., Farrar v. Hobby, --- U.S. ----, ----, 113 S.Ct. 566, 573, 121 L.Ed.2d 494 (1992) (civil rights plaintiff who
won only nominal damages of one dollar still "prevailing party" and thus eligible for attorney's fee award).
Ean-Chea points to the poor winning percentage posted by Gamma and concludes that Gamma cannot possibly be a
"prevailing party." We disagree. In the first place, the voluntarily dismissed claims were not copyright claims and
thus not germane to the determination of whether Gamma was a "prevailing party" under the Copyright Act. More
importantly, this court has firmly rejected a "mathematical approach" to the "prevailing party" determination. See
Domegan, 972 F.2d at 407 n. 9. In any event, it is well settled that "the degree of the plaintiff's overall success goes
to the reasonableness" and not the allowability of an attorney's fee award. Farrar, --- U.S. at ----, 113 S.Ct. at 574
(quoting Texas State Teachers Assn. v. Garland Independent School Dist., 489 U.S. 782, 793, 109 S.Ct. 1486, 1494,
103 L.Ed.2d 866 (1989)). We affirm the district court's determination that Gamma was the "prevailing party," and
hence eligible for a fee award.
We have considered Ean-Chea's remaining arguments and find them to be without merit.
B. Gamma's Cross-Appeal
As its first ground for appeal Gamma argues that the district court clearly erred by finding that it failed to prove that
Ean-Chea had either reproduced or distributed the videotapes of Hunters Prey.
We start with the proposition that the plaintiff in a copyright action carries the burden of proof. Concrete Machinery
Co. v. Classic Lawn Ornaments, Inc., 843 F.2d 600, 605 (1st Cir.1988); Motta v. Samuel Weiser, Inc., 768 F.2d 481,
483 (1st Cir.), cert. denied, 474 U.S. 1033, 106 S.Ct. 596, 88 L.Ed.2d 575 (1985). To carry this burden a plaintiff
must prove each of the elements of copyright infringement: (1) ownership of the copyright; and (2) copying by the
defendant. Id. It is undisputed that Gamma satisfied the first prong of this test, and Gamma argues that it met the
second through circumstantial evidence presented at trial.
We have recognized that, in a copyright action, proof by direct evidence of copying is generally not possible since
the actual act of copying is rarely witnessed or recorded. Normally, there is no physical proof of copying other than
the offending object itself. Copying therefore is generally established by showing that the defendant had access to
the copyrighted work and that the offending and copyrighted articles are "substantially similar."
Concrete Machinery Co., 843 F.2d at 605. "Copying is demonstrated when someone who has access to a copyrighted
work uses material substantially similar to the copyrighted work in a manner which interferes with a right protected
by 17 U.S.C. Sec. 106." Ford Motor Co. v. Summit Motor Products, Inc., 930 F.2d 277, 291 (3d Cir.1991) (footnote
omitted). Among the rights protected by Sec. 106 are the rights to copy and distribute the copyrighted work.
Both access and substantial similarity are undisputed in the present case, and there was no question that the
videotapes of Hunters Prey found in Ean-Chea's store were piratical copies.5 Ean-Chea, however, disclaimed any
knowledge of the Hunters Prey tapes found at his store, and denied that he had ever copied or distributed tapes of
Hunters Prey. Ean-Chea testified that a customer must have rented the tapes at another video store and accidentally
returned them to Overseas Video.
The function of the district court acting as fact-finder was to determine, by weighing all of the evidence, if Gamma
had met its ultimate burden of persuasion. The court concluded that it had not. The court found that "[t]he only
direct evidence with respect to Hunters Prey is that at the time of the raid there were ... 10 or 11 tapes, in a box
near the counter." Viewing this evidence along with the circumstantial evidence, which consisted primarily of the fact
that videotape copy machines were found at Ean-Chea's store, the district court found that either of two conclusions
were possible: either (1) appellant had copied tapes of Hunters Prey and/or held them out for distribution; or (2) the
tapes belonged to another store and some customer erroneously returned them to Ean-Chea's store. According to
the district court, the latter "is an equally believable version on the basis of the evidence...." Id.
Taken as a whole the court found that the evidence was ambiguous to the extent that it was "not prepared to draw
the inference" that Gamma wished it to draw, namely, that Ean-Chea either copied or distributed videotapes of
Hunters Prey.
Although the evidence could have supported a finding of infringement, the district court credited a plausible, lawful
explanation for the presence of the tapes at Ean-Chea's store. It is established beyond cavil that the trial judge is in
the best position to assess the credibility of witnesses, see Wainwright v. Witt, 469 U.S. 412, 428, 105 S.Ct. 844,
854, 83 L.Ed.2d 841 (1985) (assessing the credibility of witnesses is peculiarly within the trial judge's province), and
great deference must be given to a trial court's findings based on credibility determinations. Rodriguez-Morales v.
The Veterans Administration, 931 F.2d 980, 982 (1st Cir.1991). "Where there are two permissible views of the
evidence, the interpretation assigned by the fact-finder must be adopted." Id. Given the restricted nature of our
review of the district court's findings of fact, we cannot say that it clearly erred in finding that Gamma failed to carry
its burden of proving that Ean-Chea had either made unauthorized copies or unauthorized rentals of videotapes of
Hunters Prey.
Gamma argues that it is entitled to four awards of statutory damages for Ean-Chea's willful infringement of episodes
thirteen through sixteen of Jade Fox. Under the Copyright Act a party may seek an award of statutory damages "in
lieu" of actual damages. 17 U.S.C. Sec. 504(c). Section 504(c) provides for an award of statutory damages "for all
infringements involved in the action, with respect to any one work," and further provides that for "purposes of this
subsection, all the parts of a compilation or derivative work constitute one work." 17 U.S.C. Sec. 504(c)(1)
(emphasis added).
The district court gave Gamma a single award of statutory damages. Although Ean-Chea was found to have
infringed upon the copyrights in four separate episodes of Jade Fox, the court found that these episodes constituted
one "work" for purposes of computing statutory damages. Since the district court's findings on this issue were
substantially influenced by its choice of a different legal standard than we apply, its determination on this mixed
question of law and fact is entitled to less deference on review than would be accorded a pure finding of fact. See
United States v. Howard, 996 F.2d 1320, 1327 (1st Cir.1993); see also Picture Music, Inc. v. Bourne, Inc., 457 F.2d
1213, 1215 n. 5 (2d Cir.1972) (rejecting "clearly erroneous" standard when reviewing whether work was created "for
hire" under Sec. 24 of Copyright Act).
Our discussion is guided by the Second Circuit's recent decision in Twin Peaks Productions v. Publications Intern.,
996 F.2d 1366 (2d Cir.1993). The issue in Twin Peaks was whether eight separately written teleplays (or videotapes
of eight televised episodes)6 of the television program Twin Peaks constituted eight works or a single work under
Sec. 504(c). The district court found that the infringement of each episode warranted its own award of statutory
damages, and the court of appeals affirmed.
The eight Twin Peaks episodes, as the Second Circuit explained, "represent a current television genre in which one
or more plots continue from one episode to another." Id. at 1381. In fact, Twin Peaks carried the point of the basic
plot--who killed Laura Palmer--throughout its first season. On the issue of statutory damages, the court stated:
The author of eight scripts for eight television episodes is not limited to one award of statutory damages just
because he or she can continue the plot line from one episode to the next and hold the viewers' interest without
furnishing a resolution. We might well have a different situation if a book written as a single work was then adapted
for television as a group of episodes, for example, the six-part television adaptations of John LeCarre's "Tinker,
Tailor, Soldier, Spy" and "Smiley's People." Even in such circumstances, though there would be but one book
infringed, there might be separate awards for infringement of each televised episode.
Id. The Second Circuit found that Twin Peaks was an easy case, and that the eight teleplays or televised episodes
clearly constituted eight separate works. While our case strongly resembles Twin Peaks, we pause here to assay
some differences.
First, the copyrights in episodes thirteen through sixteen of Jade Fox were registered on a single registration form,
while the eight episodes of Twin Peaks were "separately copyrighted." Id. Second, there was no evidence submitted
as to whether the scripts for episodes thirteen through sixteen of Jade Fox were separately written, whereas the
eight episodes of Twin Peaks were based upon separately written teleplays. Id.
We take a step back, at this juncture, to discuss some background concerning statutory damages in copyright
actions. Unlike the Copyright Act of 1909, under which statutory damages were available for "each infringement that
was separate," Robert Stigwood Group, Ltd. v. O'Reilly, 530 F.2d 1096, 1102 (2d Cir.1976), the present Copyright
Act "shifts the unit of damages inquiry from number of infringements to number of works." Twin Peaks, 996 F.2d at
1381. The House Report concerning Sec. 504(c)(1) makes it clear that, although the minimum and maximum
amounts [of statutory damage awards] are to be multiplied where multiple "works" are involved in the suit, the
same is not true with respect to multiple copyrights, multiple owners, multiple exclusive rights, or multiple
registrations.
H.R.Rep. No. 1476, 94th Cong., 2d Sess. 162, reprinted in 1976 U.S.C.C.A.N. 5659, 5778.
The term "work," is undefined under the Copyright Act. Although the Twin Peaks court did not undertake the task of
supplying a definition, one court of appeals has posited that "separate copyrights are not distinct works unless they
can 'live their own copyright life.' " Walt Disney Co. v. Powell, 897 F.2d 565, 569 (D.C.Cir.1990) (quoting Stigwood,
530 F.2d at 1105).7 The test set forth in Walt Disney is a functional one, with the focus on whether each expression
(or in our case, television episode) has an independent economic value and is, in itself, viable. See Walt Disney, 897
F.2d at 569; see also 3 Nimmer Sec. 14.04[E], at 14-64.
The district court's determination that all four episodes of Jade Fox were one "work" for the purpose of statutory
damages was based on two facts: that Gamma sells or rents only complete sets of the Jade Fox series to video
stores, and the copyrights in the four episodes at issue were registered on one form. The former fact, according to
the district court, "suggests plaintiffs view the Jade Fox episodes as one work for economic purposes
notwithstanding the rental by consumers of only a few episodes at a time or its production in separate episodes[,]"
while the latter fact "indicates [that] TVB [the author of Jade Fox ] considered at least these four episodes to be one
work." We do not find the district court's reasoning compelling.
Starting with the district court's second point, we find that there is simply no authority for drawing such an
inference. Under regulations promulgated by the Copyright Office, the copyrights in multiple works may be
registered on a single form, and thus considered one work for the purposes of registration, see 37 C.F.R. Sec.
202.3(b)(3)(A), while still qualifying as separate "works" for purposes of awarding statutory damages.8 We are
unable to find any language in either the statute or the corresponding regulations that precludes a copyright owner
from registering the copyrights in multiple works on a single registration form while still collecting an award of
statutory damages for the infringement of each work's copyright.
With regard to the district court's first point, that Gamma sells or rents only complete Jade Fox sets to video stores,
we do not find this fact persuasive in the present inquiry. A distributor's decision to sell or rent complete sets of a
series to video stores in no way indicates that each episode in the series is unable to stand alone.9 More significant
for present purposes is the fact that (1) viewers who rent the tapes from their local video stores may rent as few or
as many tapes as they want, may view one, two, or twenty episodes in a single sitting, and may never watch or rent
all of the episodes; and (2) each episode in the Jade Fox series was separately produced.
While our case arguably falls somewhere between the Twin Peaks and the hypothetical novel turned television mini-
series scenario presented therein, 996 F.2d at 1381, it more closely resembles Twin Peaks than the hypothetical.
Each episode of Jade Fox was produced independently from the other episodes, and each episode of Jade Fox was
aired on television independently from the preceding and subsequent episodes.10 In addition, unlike the "Tinker,
Tailor, Soldier, Spy" hypothetical in Twin Peaks, our case does not involve the infringement of a single book, but
rather, much like Twin Peaks, involves the infringement of four separately-produced television episodes prepared as
part of a weekly (or perhaps daily) series. We conclude that Gamma is entitled to four awards of statutory damages
for Ean-Chea's infringement of four separate "works."
As its final argument on its cross-appeal, Gamma contests the district court's attorney's fee award. The fee
application requested a total of $80,198.62 and costs in the amount of $7,608.87. The district court awarded all of
the requested costs, but substantially reduced Gamma's fee request, awarding $12,500. This reduction was based
on a multitude of factors.
Generally speaking, the district court found that Gamma had "over-prosecuted this case, pursued infringement
actions on works that were not registered, and achieved very limited success." More specifically, the court found that
plaintiffs had originally "filed a six-count complaint alleging a massive scheme of wrongdoing, ... seeking millions of
dollars in damages," and then, armed with a court order, raided Ean-Chea's store ... apparently expecting to uncover
a huge cache of infringing materials. Instead, what they found was a single set of pirated 'Hunters Prey' tapes
located under some trash in a cardboard box by the counter, some high speed video copying equipment, and a
business record that reflected the shipment of one unauthorized copy of a program entitled 'Serpentine Romance' to
Montreal.
The court further noted that, as trial neared, Gamma dismissed the five non-copyright claims, "and conceded that
because [the copyrights in] Serpentine Romance and twelve episodes of Jade Fox had not been registered prior to
the filing of the lawsuit, they too fell out of the case."
With respect to Gamma's fee request, the court had much to say: many of the [time-sheet] entries were extremely
vague, making it virtually impossible ... to determine whether requested hours were excessive, redundant (especially
with respect to how New York and local counsel divided tasks), or otherwise unnecessary, as well as to parse out
attorney time and expenses related to the unsuccessful claims and [voluntarily] dismissed portion of the case.
The district court then pointed out numerous ambiguities in the attorneys' records, as well as instances where
telephone conversations between counsel were reflected only in the records of one of the two attorneys. Finally the
court provided examples of charges that appeared facially excessive, such as billing the client for leaving a telephone
message when the person telephoned was absent. The court settled on a fee award that it believed represented
reasonable compensation for the nature of the work performed, taking into account how much time was actually
expended.
The district court found that the time-sheet entries submitted by Gamma's attorney's were so ambiguous that it was
not clear which claims in the complaint the entries related to. For example, the district court noted entries that
stated merely "Draft documents," "Work on Case," "Review of Discovery," and "study file, legal research re Mass.
case."
We review fee awards for abuse of discretion, see Foley v. City of Lowell, Mass., 948 F.2d 10, 18-19 (1st Cir.1991),
and " 'normally prefer to defer to any thoughtful rationale and decision developed by a trial court and to avoid
exhaustive second guessing.' " Domegan, 972 F.2d at 421 (quoting Grendel's Den, Inc. v. Larkin, 749 F.2d 945, 950
(1st Cir.1984)).
Under the circumstances, the district court clearly acted within the broad limits of its discretion by substantially
discounting Gamma's fee request. Finding no abuse, we affirm the district court's fee award.
Each party contends that, under 17 U.S.C. Sec. 505, it is entitled to recover its costs, including attorney's fees,
incurred on this appeal. In addition, Gamma seeks sanctions, in the form of attorney's fees, under Fed.R.App.P. 38.
Rule 38 allows for fees and double costs to be awarded to an appellee where the appellant has brought a frivolous
appeal. While Ean-Chea did not prevail on his appeal, we do not feel that this case warrants the imposition of
sanctions under Rule 38.
While it is true that, under Sec. 505, the Copyright Act, this court may make an award of attorney's fees to the
prevailing party for services rendered on appeal, see Twin Peaks, 996 F.2d at 1383; see also 3 Nimmer Sec.
14.10[E], at 14-129 ("An award of attorney's fees may be made for services rendered on appeal as well as at the
trial level"), we decline to do so. Because he did not prevail on his appeal or the cross-appeal, Ean-Chea is not
entitled to an award of fees. The appeal, however, was not frivolous, and Gamma only achieved limited success on
its cross-appeal. Therefore, in the exercise of our discretion we decline to award Gamma appellate fees. Gamma is,
of course, entitled to costs on appeal.
III. CONCLUSION
On Ean-Chea's appeal, the judgment of the district court is affirmed. On Gamma's cross-appeal, the judgment of the
district court is affirmed except that we reverse its finding as to the number of "works" infringed upon by Ean-Chea
for the purpose of calculating statutory damages. We hold that Ean-Chea infringed upon four works, not one. We
therefore vacate the district court's judgment ordering Ean-Chea to pay Gamma $2,500 in statutory damages, and
remand to the district court for a redetermination of damages based upon our holding.
——o0o——
PLAYBOY ENTERPRISES, INC., Plaintiff, v. George FRENA, d/b/a Techs Warehouse BBS Systems and
Consulting, and Mark Dyess, Defendants.
No. 93-489-Civ-J-20.
United States District Court, M.D. Florida, Jacksonville Division.
December 9, 1993.
ORDER
SCHLESINGER, District Judge.
This cause is before the Court on Plaintiff's First Motion for Partial Summary Judgment (Copyright Infringement) as
to Defendant Frena (Doc. No. S-1, filed July 26, 1993), and Plaintiff's Second and Third Motions for Partial Summary
Judgment (Trademark Infringement and Lanham Act Violations) as to Defendant Frena (Doc. No. S-3, filed July 29,
1993). In its First Motion for Partial Summary Judgment, Plaintiff requests that the Court grant partial summary
judgment that Defendant Frena infringed Plaintiff's copyrights and specifically that the 170 image files in question in
Exhibit C to the Tesnakis Affidavit infringed Plaintiff's copyrights in 50 of Plaintiff's copyrighted magazines. In the
Second and Third Motions for Partial Summary Judgment, Plaintiff requests that the Court grant partial summary
judgment that Defendant Frena infringed Plaintiff's federally registered trademarks PLAYBOY® and PLAYMATE®
specifically that Defendant Frena infringed United States Trademark registration numbers 600,018 and 721,987 and
that Defendant Frena competed unfairly with Plaintiff, violating 15 U.S.C. § 1125(a). Furthermore, Plaintiff asks for
oral argument on its Motions. Defendant Frena has filed responses to these Motions. (Doc. Nos. S-5 and S-6, filed
August 4, 1993).
Defendant George Frena operates a subscription computer bulletin board service, Techs Warehouse BBS ("BBS"),
that distributed unauthorized copies of Plaintiff Playboy Enterprises, Inc.'s ("PEI") copyrighted photographs. BBS is
accessible via telephone modem to customers. For a fee, or to those who purchase certain products from Defendant
Frena, anyone with an appropriately equipped computer can log onto BBS. Once logged on subscribers may browse
through different BBS directories to look at the pictures and customers may also download[1] the high quality
computerized copies of the photographs and then store the copied image from Frena's computer onto their home
computer. Many of the images found on BBS include adult subject matter. One hundred and seventy of the images
that were available on BBS were copies of photographs taken from PEI's copyrighted materials.
Defendant Frena admits that these materials were displayed on his BBS, see Answer at ¶ 23; Defendant's
Admissions, Response No. 8, that he never obtained authorization or consent from PEI, see Answer at ¶¶ 38, 39 and
40, and that each of the accused computer graphic files on BBS is substantially similar to copyrighted PEI
photographs, see Defendant's Admissions, Response No. 5. Defendant Frena also admits that each of the files in
question has been downloaded[2] by one of his customers. See Defendant's Admissions, Response No. 11.
Subscribers can upload[3] material onto the bulletin board so that any other subscriber, by accessing their computer,
can see that material. Defendant Frena states in his Affidavit filed August 4, 1993, that he never uploaded any of
PEI's photographs onto BBS and that subscribers to BBS uploaded the photographs. See Affidavit of George Frena at
¶ 6 (Doc. No. S-7). Defendant Frena states that as soon as he was served with a summons and made aware of this
matter, he removed the photographs from BBS and has since that time monitored BBS to prevent additional
photographs of PEI from being uploaded. See Affidavit of George Frena at ¶ 6.
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories [1555] and admissions
on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the initial
burden of showing the Court, by reference to materials on file that there are no genuine issues of material fact that
should be decided at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Clark v.
Coats & Clark, Inc., 929 F.2d 604 (11th Cir. 1991). A moving party discharges its burden on a motion for summary
judgment by "showing" or "pointing out" to the Court that there is an absence of evidence to support the nonmoving
party's case. Celotex, 477 U.S. at 325, 106 S.Ct. at 2554. Rule 56 permits the moving party to discharge its burden
with or without supporting affidavits and to move for summary judgment on the case as a whole or on any claim. Id.
When a moving party has discharged its burden, the nonmoving party must then "go beyond the pleadings," and by
its own affidavits, or by "depositions, answers to interrogatories, and admissions on file," designate specific facts
showing that there is a genuine issue for trial. Id. at 324.
In determining whether the moving party has met its burden of establishing that there is no genuine issue as to any
material fact and that it is entitled to judgment as a matter of law, the Court must draw inferences from the
evidence in the light most favorable to the nonmovant, Key West Harbor v. City of Key West, 987 F.2d 723, 726
(11th Cir.1993), and resolve all reasonable doubts in that party's favor. Spence v. Zimmerman, 873 F.2d 256, 257
(11th Cir.1989). The nonmovant need not be given the benefit of every inference, but only of every "reasonable"
inference. Brown v. City of Clewiston, 848 F.2d 1534, 1540 n. 12 (11th Cir.1988). The Eleventh Circuit has explained
the reasonableness standard:
In deciding whether an inference is reasonable, the Court must "cull the universe of possible inferences from the
facts established by weighing each against the abstract standard of reasonableness." [citation omitted]. The
opposing party's inferences need not be more probable than those inferences in favor of the movant to create a
factual dispute, so long as they reasonably may be drawn from the facts. When more than one inference reasonably
can be drawn, it is for the trier of fact to determine the proper one.
Thus, if a reasonable fact finder evaluating the evidence could draw more than one inference from the facts, and if
that inference introduces a genuine issue of material fact, then the court should not grant the summary judgment
motion. Augusta Iron and Steel Works v. Employers Insurance of Wausau, 835 F.2d 855, 856 (11th Cir.1988). It
must be emphasized that the mere existence of some alleged factual dispute will not defeat an otherwise properly
supported summary judgement motion. Rather, "the requirement is that there be no genuine issue of material fact."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A dispute
about a material fact is "genuine" if the "evidence is such that a reasonable jury could return a verdict for the
nonmoving party." Id. at 248, 106 S.Ct. at 2510. The inquiry is "whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of
law." Id. at 251-52, 106 S.Ct. at 2511-12.
I. COPYRIGHT INFRINGEMENT
The Copyright Act of 1976 gives copyright owners control over most, if not all, activities of conceivable commercial There is no dispute that Defendant Frena supplied a product containing unauthorized copies of a copyrighted work.
value. The statute provides that It does not matter that Defendant Frena claims he did not make the copies itself. See JAY DRATLER, JR., Intellectual
Property Law: Commercial, Creative and Industrial Property § 6.01[3], at 6-15 (1991).
the owner of a copyright ... has the exclusive rights to do and to authorize any of the following:
(1) to reproduce the copyrighted work in copies ...; (2) to prepare derivative works based upon Furthermore, the "display" rights of PEI have been infringed upon by Defendant Frena. See 17 U.S.C. § 106(5). The
the copyrighted work; (3) to distribute copies ... of the copyrighted work to the public ... and (5) concept of display is broad. See 17 U.S.C. § 101. It covers "the projection of an image on a screen or other surface
in the case of ... pictorial ... works ... to display the copyrighted work publicly. by any method, the transmission of an image by electronic or other means, and the showing of an image on a
cathode ray tube, or similar viewing apparatus connected with any sort of information storage and retrieval system."
17 U.S.C. § 106. Engaging in or authorizing any of these categories without the copyright owner's permission H.R.Rep. No. 1476, 94th Cong., 2d Sess. 64 (Sept. 3, 1976), reprinted in 1976 U.S.Code Cong. & Admin.News
violates the exclusive [1556] rights of the copyright owner and constitutes infringement of the copyright. See 17 [1557] 5659, 5677. The display right precludes unauthorized transmission of the display from one place to another,
U.S.C. § 501(a). for example, by a computer system. See H.R.Rep. No. 1476, 94th Cong., 2d Sess. 80 (Sept. 3, 1976), reprinted in
1976 U.S.Code Cong. & Admin.News 5659, 5694; JAY DRATLER, JR., Intellectual Property Law: Commercial,
To establish copyright infringement, PEI must show ownership of the copyright and "copying" by Defendant Frena,
Creative and Industrial Property § 6.01[4], at 624 (1991).
see Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991); Southern
Bell Tel. & Tel. v. Assoc. Telephone Directory Publishers, 756 F.2d 801, 810 (11th Cir.1985). "Display" covers any showing of a "copy" of the work, "either directly or by means of a film, slide, television image
or any other device or process." 17 U.S.C. § 101. However, in order for there to be copyright infringement, the
There is no dispute that PEI owns the copyrights on the photographs in question. PEI owns copyright registrations
display must be public. A "public display" is a display "at a place open to the public or ... where a substantial number
for each of the 50 issues of Playboy publications that contain the photographs on BBS. See Tesnakis Affidavit at ¶ 9.
of persons outside of a normal circle of family and its social acquaintenances is gathered." 2 MELVILLE B. NIMMER,
The copyright registration certificate constitutes prima facie evidence in favor of Plaintiff. See Southern Bell Tel., 756
Nimmer on Copyright § 8.14[C], at 8-169 (1993). A place is "open to the public" in this sense even if access is
F.2d at 811. Once the plaintiff has established his prima facie ownership, the burden then shifts to the defendant to
limited to paying customers. 2 MELVILLE B. NIMMER, Nimmer on Copyright § 8.14[C], at 8-169 n. 36 (1993); see
counter this evidence. See 3 MELVILLE B. NIMMER, Nimmer on Copyright § 13.01[A], at 13-7 (1993). Defendant
Columbia Pictures Indus., Inc. v. Redd Horne Inc., 749 F.2d 154 (3d Cir.1984).
Frena, however, failed to rebut the appropriate inference of validity.
Defendant's display of PEI's copyrighted photographs to subscribers was a public display. Though limited to
Next, PEI must demonstrate copying by Defendant Frena. Since direct evidence of copying is rarely available in a
subscribers, the audience consisted of "a substantial number of persons outside of a normal circle of family and its
copyright infringement action, copying may be inferentially proven by showing that Defendant Frena had access to
social acquaintenances." 2 MELVILLE B. NIMMER, Nimmer on Copyright § 8.14[C], at 8-169 (1993). See also
the allegedly infringed work, that the allegedly infringing work is substantially similar to the copyrighted work, see
Thomas v. Pansy Ellen Products, 672 F.Supp. 237, 240 (W.D.North Carolina 1987) (display at a trade show was
Howard v. Sterchi, 974 F.2d 1272 (11th Cir.1992), and that one of the rights statutorily guaranteed to copyright
public even though limited to members); Ackee Music, Inc. v. Williams, 650 F.Supp. 653 (D.Kan.1986) (performance
owners is implicated by Frena's actions. See Ford Motor Co. v. Summit Motor Products, Inc., 930 F.2d 277, 291 (3d
of copyrighted songs at defendant's private club constituted a public performance).
Cir.1991), cert. denied, ___ U.S. ___, 112 S.Ct. 373, 116 L.Ed.2d 324.
Defendant Frena argues that the affirmative defense of fair use precludes a finding of copyright infringement. "Fair
Access to the copyrighted work is not at issue. Access is essentially undeniable because every month PEI sells over
use" describes "limited and useful forms of copying and distribution that are tolerated as exceptions to copyright
3.4 million copies of Playboy magazine throughout the United States. See Kent Affidavit at ¶ 4.
protection." Cable/Home Communications Corp., 902 F.2d at 843 (citing Pacific & Southern Co. v. Duncan, 744 F.2d
Substantial similarity is also a non-issue in this case. Defendant Frena has admitted that every one of the accused 1490, 1494 (11th Cir.1984), cert. denied, 471 U.S. 1004, 105 S.Ct. 1867, 85 L.Ed.2d 161 (1985)).
images is substantially similar to the PEI copyrighted photograph from which the accused image was produced. See
The question of fair use constitutes a mixed issue of law and fact. See Harper & Row, Publishers, Inc. v. Nation
Defendant's Admissions at ¶ 5. Moreover, not only are the accused works substantially similar to the copyrighted
Enterprises., 471 U.S. 539, 560, 105 S.Ct. 2218, 2230, 85 L.Ed.2d 588 (1985). Fair use may be addressed on
work, but the infringing photographs are essentially exact copies. See Exhibits A and B in the Tesnakis Affidavit. In
summary judgment. See Cable/Home Communications Corp., 902 F.2d at 843-45 (affirming summary judgment
many cases, the only difference is that PEI's written text appearing on the same page of the photograph has been
holding that fair use doctrine did not apply).
removed from the infringing copy.
The Copyright Act mandates four nonexclusive factors which courts shall consider case by case in determining fair
The next step is to determine whether Defendant Frena violated one of the rights statutorily guaranteed to copyright
use. Cable/Home Communications Corp., 902 F.2d at 843; see 17 U.S.C. § 107. Section 107 does not attempt to
owners under 17 U.S.C. § 106. See 17 U.S.C. § 501(a).
define "fair use." It merely lists the factors to be considered in determining whether a use made of a work in a
Public distribution of a copyrighted work is a right reserved to the copyright owner, and usurpation of that right particular case is fair. Section 107 states:
constitutes infringement. See Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829, 843
[T]he fair use of a copyrighted work ... for purposes such as criticism, comment, news reporting, teaching (including
(11th Cir.1990). PEI's right under 17 U.S.C. § 106(3) to distribute copies to the public has been implicated by
multiple copies for classroom use), scholarship or research, is not an infringement of copyright. In determining
Defendant Frena. Section 106(3) grants the copyright owner "the exclusive right to sell, give away, rent or lend any
whether the use made of a work in any particular case is a fair use the factors to be considered shall include —
material embodiment of his work." 2 MELVILLE B. NIMMER, Nimmer on Copyright § 8.11[A], at 8-124.1 (1993).
 (1) the purpose and character of the use, including whether such use is of a commercial nature
or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a
whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
With respect to the first factor, "every commercial use of copyrighted material is presumptively an unfair exploitation
of the monopoly privilege that belongs to the owner of the copyright ...," Harper & Row, Publishers, Inc., 471 U.S. at
562, 105 S.Ct. at 2231 (quoting Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 451, 104 S.Ct. 774, 793, 78
L.Ed.2d 574 (1984)), so that "any [1558] commercial use tends to cut against a fair use defense." Triangle
Publications, Inc. v. Knight-Ridder Newspapers, Inc., 626 F.2d 1171, 1175 (5th Cir.1980).
Defendant Frena's use was clearly commercial. BBS was provided to those paying twenty-five dollars ($25) per
month or to those who purchased products from Defendant Frena. One who distributes copyrighted material for
profit is engaged in a commercial use even if the customers supplied with such material themselves use it for
personal use. See Pacific & Southern Co. v. Duncan, 572 F.Supp. 1186 (N.D.Ga.1983), affirmed, 744 F.2d 1490
(11th Cir.1984), cert. denied, 471 U.S. 1004, 105 S.Ct. 1867, 85 L.Ed.2d 161 (1985).
Implicit in the presumption that every commercial use is presumptively unfair is "some meaningful likelihood that
future market harm exists." Cable/Home Communications Corp., 902 F.2d at 844 (citing Sony, 464 U.S. at 451, 104
S.Ct. at 793). It is clear that future market harm exists to PEI due to Frena's activities, as will be discussed in more
detail under factor four.
The second factor is the "nature of the copyrighted work." 17 U.S.C. § 107. "Copyright protection is narrower, and
the corresponding application of fair use defense greater, in the case of factual works than in the case of works of
fiction or fantasy." 3 MELVILLE B. NIMMER, Nimmer on Copyright § 13.05[A], at 13-102.57 (1993). If a work is more
appropriately characterized as entertainment, it is less likely that a claim of fair use will be accepted. See In New Era
Publications Intern., ApS v. Carol Publishing Group, 904 F.2d 152 (2d Cir.), cert. denied, 498 U.S. 921, 111 S.Ct.
297, 112 L.Ed.2d 251 (1990). The copyrighted works involved in this case are in the category of fantasy and
entertainment. Therefore, the second factor works against Frena's fair use defense.
Regarding the third factor, the amount and substantiality of the portion of the copyrighted work used, the Supreme
Court has directed a qualitative evaluation of the copying of the copyrighted work. Cable/Home Communications
Corp., 902 F.2d at 844 (citing Harper & Row, 471 U.S. at 564-65, 105 S.Ct. at 2232-33). That is, "a small degree of
taking is sufficient to transgress fair use if the copying is the essential part of the copyrighted work." Id. See, e.g.,
Meeropol v. Nizer, 560 F.2d 1061, 1071 (2d Cir.1977) (although copyrighted letters were less than 1% of the
infringing work, they were displayed prominently), cert. denied, 434 U.S. 1013, 98 S.Ct. 727, 54 L.Ed.2d 756 (1978);
Roy Export Co. Establishment of Vaduz, Liechtenstein, Black, Inc. v. Columbia Broadcasting Sys., Inc., 503 F.Supp.
1137, 1145 (S.D.N.Y. 1980) (fifty-five seconds taken from a onehour and twenty-nine-minute film deemed
qualitatively substantial for copyright infringement), aff'd, 672 F.2d 1095 (2d Cir.), cert. denied, 459 U.S. 826, 103
S.Ct. 60, 74 L.Ed.2d 63 (1982); Sheldon v. MetroGoldwyn Pictures Corp., 81 F.2d 49, 56 (2d Cir.) ("[N]o plagiarist
can excuse the wrong by showing how much of his work he did not pirate."), cert. denied, 298 U.S. 669, 56 S.Ct.
835, 80 L.Ed. 1392 (1936).
There is no doubt that the photographs in Playboy magazine are an essential part of the copyrighted work. The
Court is not implying that people do not read the articles in PEI's magazine. However, a major factor to PEI's success
is the photographs in its magazine. By pirating the photographs for which PEI has become famous, Defendant Frena
has taken a very important part of PEI's copyrighted publications.
The fourth factor, the "effect of the use upon the potential market for or value of the copyrighted work," 17 U.S.C. §
107(4), is "undoubtedly the single most important element of fair use, since a proper application of fair use does not
impair materially the marketability of the copied work." Cable/Home Communications Corp., 902 F.2d at 845. This
factor poses the issue of "whether unrestricted and widespread conduct of the sort engaged in by the defendant
(whether in fact engaged in by the defendant or others) would result in a substantially adverse impact on the
potential market for or value of the plaintiff's present work." 3 MELVILLE B. NIMMER, Nimmer on Copyright §
13.05[A], at 13.102.61-62 (1993). "[P]otential market means either an immediate or delayed market, and includes
harm to derivative works." Cable/Home [1559] Communications Corp., 902 F.2d at 845.
Obviously, if this type of conduct became widespread, it would adversely affect the potential market for the
copyrighted work. Such conduct would deny PEI considerable revenue to which it is entitled for the service it
provides.
There is irrefutable evidence of direct copyright infringement in this case. It does not matter that Defendant Frena
may have been unaware of the copyright infringement. Intent to infringe is not needed to find copyright
infringement. Intent or knowledge is not an element of infringement, and thus even an innocent infringer is liable for
infringement; rather, innocence is significant to a trial court when it fixes statutory damages, which is a remedy
equitable in nature. See D.C. Comics Inc. v. Mini Gift Shop, 912 F.2d 29 (2d Cir.1990).
Frena argues that his commercial use was so insignificant as to justify holding for him under the principle of de
minimis non curat lex. The Court disagrees. The detrimental market effects coupled with the commercial-use
presumption negates the fair use defense. Defendant Frena infringed Plaintiff's copyrights; specifically, the 170
image files in question in Exhibit C to the Tesnakis Affidavit infringed Plaintiff's copyrights in 50 of Plaintiff's
copyrighted magazines. The Court finds that the undisputed facts mandate partial summary judgment that
Defendant Frena's unauthorized display and distribution of PEI's copyrighted material is copyright infringement
under 17 U.S.C. § 501.
II. TRADEMARK INFRINGEMENT UNDER 15 U.S.C. § 1114
In addition to the use of PEI's copyrighted photographs on BBS, PEI's registered trademarks, PLAYBOY® and
PLAYMATE®, were used to identify many of the files containing the photographs. Furthermore, PEI's text was
removed from the photographs and Defendant Frena's name, Techs Warehouse BBS, and telephone number were
placed on PEI's copyrighted photographs. This is uncontested. Therefore, Plaintiff has moved for partial summary
judgment on the issues of trademark infringement under 15 U.S.C. § 1114 and unfair competition under 15 U.S.C. §
1125(a).
Defendant Frena admits that the registered trademarks PLAYBOY® and PLAYMATE® were used in file descriptors
for 170 of the images found on BBS and that such file descriptors were displayed to his customers. See Answer at ¶¶
51 and 52. Defendant Frena contends that when a subscriber uploads the material onto BBS, the same subscriber
provides a description of the uploaded material for the BBS index. Defendant Frena contends that he himself has
never placed the words "Playboy" or "Playmate" onto BBS. Defendant Frena further alleges that he, innocently and
without malice, allowed subscribers to upload whatever they wanted onto BBS.
The first issue the Court must address is whether the marks PLAYBOY® and PLAYMATE® are distinctive enough to
deserve protection under the Trademark Act of 1946 (commonly known as the Lanham Act), 15 U.S.C. § 1051 et
seq., specifically § 32(1) of the Lanham Act, 15 U.S.C. § 1114(1). See Freedom Sav. and Loan Ass'n v. Way, 757
F.2d 1176 n. 1 (11th Cir.), cert. denied, 474 U.S. 845, 106 S.Ct. 134, 88 L.Ed.2d 110 (1985); Ice Cold Auto Air v.
Cold Air & Accessories, 828 F.Supp. 925, 930 (M.D.Fla. 1993).
There are four categories of distinctiveness in which a mark may be classified. "In ascending order they are: (1)
generic; (2) descriptive; (3) suggestive; and (4) arbitrary or fanciful." Investacorp, Inc. v. Arabian Investment
Banking Corp., 931 F.2d 1519, 1522-23 (11th Cir.1991), cert. denied, ___ U.S. ___, 112 S.Ct. 639, 116 L.Ed.2d 657
(1991). The categorization of a term as generic, descriptive, suggestive or arbitrary typically resolves the issue of
whether a mark is protectable, with generic marks getting the least protection and arbitrary or fanciful marks
receiving the highest degree of protection.
PLAYBOY® and PLAYMATE® are suggestive marks since they implicitly refer to their products qualities. See PEI v.
P.K. [1560] Sorren Export Co. Inc. of Florida, 546 F.Supp. 987, 995 (S.D.Fl.1982). They are well known marks and
widely associated with PEI's products. These marks have acquired great distinctiveness among consumers, and are
therefore entitled to a high degree of protection. See Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 486
F.Supp. 414, 419 (S.D.N.Y.1980).
Once the threshold question of whether the mark is distinctive enough to deserve protection is answered
affirmatively, the Court must turn to the central inquiry of whether there is a "likelihood of confusion." See Freedom
Sav. and Loan Ass'n, 757 F.2d at 1179; Ice Cold Auto Air, 828 F.Supp. at 934.
The following factors are highly relevant in deciding whether there is a likelihood of confusion: "(1) the type of mark
at issue; (2) similarity of marks; (3) similarity of product or services; (4) identity of purchasers and similarity of retail
outlets; .... (6) the defendant's intent; and (7) actual confusion." Ice Cold Auto Air, 828 F.Supp. at 935 (citing
Freedom Sav. and Loan Ass'n, 757 F.2d at 1182-83). The Court, however, is not required to specifically mention
each of these factors in making its decision. See Univ. of Georgia Athletic Ass'n v. Laite, 756 F.2d 1535, 1542 (11th
Cir.1985) (analyzing the factors in the context of a claim of unfair competition).
Rather than simply determining whether a majority of these factors indicate a likelihood of confusion, a court must
"evaluate the weight to be accorded the individual factors and then make its ultimate decision." AmBrit, Inc. v. Kraft,
Inc., 812 F.2d 1531, 1538 (11th Cir.1986), cert. denied, 481 U.S. 1041, 107 S.Ct. 1983, 95 L.Ed.2d 822 (1987). An
analysis of fewer than all seven factors may support a finding of likelihood of confusion. See Univ. of Georgia Athletic
Ass'n, 756 F.2d at 1543. In the Eleventh Circuit, the type of mark and evidence of actual confusion are the most
important factors. Dieter v. B & H Industries of Southwest Florida, Inc., 880 F.2d 322, 326 (11th Cir.1989), cert.
denied, 498 U.S. 950, 111 S.Ct. 369, 112 L.Ed.2d 332 (1990).
In analyzing the type of mark, the Court must determine whether the mark is strong or weak in order to determine
the level of protection to be extended to the mark. See Ice Cold Auto Air, 828 F.Supp. at 935.
The more distinctive a plaintiff's servicemark, the greater the likelihood that consumers will associate the registered
trademark and all similar marks with the registered owner. The law therefore provides the greatest protection to
strong and distinctive servicemarks; the strength of a mark depends on the extent of third party usage and the
relationship between the name and the service or good it describes. Freedom Sav. and Loan Assoc., 757 F.2d at
1182.
In analyzing the relationship between the name and the service or good it describes, the Court again considers the
proper categorization of the mark. At this stage of the analysis, the goal is to determine the degree of distinctiveness
of the mark. See Ambrit, Inc., 812 F.2d at 1539 n. 36. Suggestive and arbitrary marks are considered to be the most
distinctive marks, and, as relatively strong marks, entitled to the strongest protection. See Ice Cold Auto Air, 828
F.Supp. at 935. The Court previously categorized the marks involved as suggestive marks which are, therefore,
entitled to the strongest protection.
There is no issue as to the similarity of the marks in the instant case. Not only are the marks similar, they are exactly
the same.
The greater the similarity between products and services, the greater the likelihood of confusion. See Exxon Corp. v.
Texas Motor Exchange of Houston, Inc., 628 F.2d 500, 505 (5th Cir.1980). Defendant Frena's product consisted of
computer images of nude women. Of course, this is the core of PEI's business. Even though Defendant Frena's
photographs were available in a different medium than Plaintiff's, the services both parties provided were virtually
identical.
A finding that Defendant adopted a mark with the intent of deriving benefit from the reputation of Plaintiff's service
or product may alone be enough to justify an inference that there is confusing similarity. See Ambrit, Inc., 812 F.2d
at 1542. Defendant [1561] contends that he did not intend to use Plaintiff's mark. However, a showing of intent or
bad faith is unnecessary to establish a violation of § 1141(a). See Chanel, Inc. v. Italian Activewear of Florida, Inc.,
931 F.2d 1472, 1476 (11th Cir.1991). Intent is just one of the factors to consider in evaluating whether the
infringing use is likely to cause confusion. See Chanel, Inc., 931 F.2d at 1472, 1476 n. 4 (citing Original Appalachian
Artworks, Inc. v. The Toy Loft, 684 F.2d 821, 831-32 (11th Cir.1982)).
Even though a guilty state of mind is relevant evidence of trademark infringement, an innocent state of mind is
irrelevant on the issue of likelihood of confusion since the lack of intent to deceive does nothing to alleviate the
confusion precipitated by similarity of trademarks. See 3A RUDOLF CALLMAN, The Law of Unfair Competition,
Trademarks and Monopolies § 20.49, at 385 (4th ed. 1993).
"Although evidence of actual confusion is not necessary to a finding of likelihood of confusion, it is nevertheless the
best evidence of likelihood of confusion." John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 978 (11th
Cir.1983) (quoting Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 263 (5th Cir.), cert. denied, 449 U.S. 899,
101 S.Ct. 268, 66 L.Ed.2d 129 (1980)). Actual confusion by a few customers is evidence of likelihood of confusion by
many customers. See Freedom Sav. and Loan Ass'n, 757 F.2d at 1185. Therefore, a plaintiff usually will not have to
prove more than a few incidents of actual confusion. See id.
In its Motion for Summary Judgment, Plaintiff has not shown any evidence of actual confusion among consumers.
However, it is not necessary to prove actual confusion on the part of customers. It is just that if evidence of actual
confusion is available, it is so highly probative of likelihood of confusion that it can rarely be ignored.
An examination of the factors mentioned above indicates that Defendant Frena's use of PEI's marks is likely to
confuse consumers. Defendant Frena is not merely using marks similar to those of Plaintiff, Defendant Frena is using
the exact marks registered to Plaintiff.
This case involves a suggestive mark entitled to the strongest protection, Defendant Frena used the identical mark of
Plaintiff and the services involved were virtually identical. Each of these elements tends to show a likelihood of
confusion. It is likely that customers of Defendant Frena would believe that PEI was the source of Defendant Frena's
images and that PEI either sponsored, endorsed or approved Defendant Frena's use of PEI's images.
It is well established that "falsely suggesting affiliation with the trademark owner in a manner likely to cause
confusion as to source of sponsorship constitutes infringement." Burger King v. Mason, 710 F.2d 1480, 1492 (11th
Cir.1983), cert. denied, 465 U.S. 1102, 104 S.Ct. 1599, 80 L.Ed.2d 130 (1984). Further, "the law is established that
falsely suggesting the existence of affiliation with a well-known business by usurping the latter's good-will
constitutes both trademark infringement and unfair competition." Showtime/The Movie Channel v. Covered Bridge
Condominium Assoc., Inc., 693 F.Supp. 1080, 1089 (S.D.Fla.1988) (quoting Volkswagenwerk Aktiengesellschaft v.
Tatum, 344 F.Supp. 235, 237 (S.D.Fla.1972)).
The Court finds that Defendant Frena infringed Plaintiff's federally registered trademarks PLAYBOY® and
PLAYMATE®. More specifically, Defendant Frena infringed United States Trademark registration numbers 600,018
and 721,987.
III. UNFAIR COMPETITION UNDER 15 U.S.C. § 1125(a)
Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), provides:
(a)(1) Any person who, or in connection with any goods or services, or any container for goods, uses in commerce
any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or
misleading description of fact, or false or misleading representation of fact which —
(A) is likely to cause confusion or to cause mistake, or to deceive as to the [1562] affiliation,
connection, or association of such person with another person, or as to the origin, sponsorship,
or approval of his or her goods, services or commercial activities by another person, or
(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities,
or geographic origin of his or her or another person's goods, services, or commercial activities,
shall be liable in a civil action by any person who believes that he or she is or is likely to be
damages by such act.
15 U.S.C. § 1125(a). This statutory provision provides a federal cause of action for unfair competition. There are
similarities between the analysis required for trademark infringement and for unfair competition. However, the unfair
competition claim is broader. See Ice Cold Auto Air, 828 F.Supp. at 938 n. 14 (citing Freedom Sav. and Loan Ass'n v.
Way, 757 F.2d 1176, 1186 (11th Cir.1985)), cert. denied, 474 U.S. 845, 106 S.Ct. 134, 88 L.Ed.2d 110 (1985).
15 U.S.C. § 1125(a) is designed to protect against a broader range of deceptive or unfair trade practices than 15
U.S.C. § 1114. In addition, both sections require the same test to determine whether the particular actions
complained of are violative of their terms. See Showtime/The Movie Channel v. Covered Bridge Condo, 693 F.Supp.
1080, 1090 (S.D.Fla.1988). Thus, as a general rule, the same set of facts which support an action for trademark
infringement also support an action for unfair competition. See Babbit Electronics Inc. v. Dynascan Corp., 828
F.Supp. 944, 957 (S.D.Fla.1993); Marathon Mrg. Co. v. Enerlite Products Corp., 767 F.2d 214, 217 (5th Cir.1985).
Therefore, it appears that Defendant Frena violated 15 U.S.C. § 1125(a).
Defendant Frena has violated 15 U.S.C. § 1125(a) by falsely inferring and describing the origin of PEI's photographs.
Defendant Frena makes it appear that PEI authorized Defendant Frena's product. Furthermore, the removal of PEI's
trademarks from the photographs constitutes "reverse passing off." See 3A RUDOLF CALLMAN, The Law of Unfair
Competition, Trademarks and Monopolies § 21.18, at 170 (4th ed. 1993).
PEI's trademarks were obliterated from the photographs, and then Defendant Frena attempted to take credit for
Plaintiff's work by placing its own advertisement with its phone number on some of the photographs. Thus, PEI has
been denied the right to public credit for the success and quality of its goods. Reverse passing off is a violation of §
43(a) of the Lanham Act. See Roho, Inc. v. Marquis, 902 F.2d 356 (5th Cir.1990); Debs v. Meliopoulos, 1991
U.S.Dist. LEXIS 19864 (N.D.Ga.1991).
There is no liability for reverse passing off when a defendant modifies a product to such an extent that the
defendant converts it into something different in kind from the original product. Defendant Frena, however, did not
convert PEI's product to such an extent that it could be considered different in kind from PEI's product.
In Roho, the defendant purchased the plaintiff's wheelchair cushions on the open market, removed plaintiff's labels
therefrom, and fastened them together to make bed mattresses. It was held that the two products were
commercially distinct, and that therefore defendant was not simply reselling the product of plaintiff. In the instant
case, however, Defendant Frena is simply reselling the product of PEI stripped of its original identity.
Defendant Frena's actions of deleting Plaintiff's text from the photographs, adding his own text to some of the
photographs and appropriating PEI's photographs without attribution to the copyright owner violated Section 43(a)
of the Lanham Act. Defendant Frena competed unfairly with Plaintiff, violating 15 U.S.C. § 1125(a).
Accordingly,
(1) Plaintiff's Request for Oral Argument on its Motion for Partial Summary Judgment (Doc. No. S-1) is DENIED,
(2) Plaintiff's Request for Oral Argument on its Second and Third Motions for Partial Summary Judgment (Doc. No.
S-3) is DENIED,
[1563] (3) Plaintiff's First Motion for Partial Summary Judgment (Copyright Infringement) as to Defendant Frena
(Doc. No. S-1) is GRANTED,
(4) Plaintiff's Second and Third Motions for Partial Summary Judgment (Trademark Infringement and Lanham Act
Violations) as to Defendant Frena (Doc. No. S-3) are GRANTED and
(4) The remaining issues of the injunction and damages are still remaining for the Court to decide.
DONE AND ORDERED.
——o0o——
TWIN PEAKS PRODUCTIONS, INC., Plaintiff-Appellee-Cross-Appellant, vs. PUBLICATIONS
INTERNATIONAL, LTD., Louis N. Weber, Scott Knickelbine, and Penguin USA, Inc., Defendants-
Appellants-Cross-Appellees.
Nos. 919, 1392, Dockets 92-7933, 92-7985.
United States Court of Appeals, Second Circuit.
This appeal requires adjustment of the competing rights of authors under circumstances where the work of a second
author contains both comment on a well-known work of a first author and substantial portions of the normally
protectable expression contained in the first work. The appeal presents several copyright and trademark issues
arising out of defendants' publication of a book about plaintiff's popular television program "Twin Peaks." The major
copyright issue is whether a book containing a detailed summary of the plot of a fictional work constitutes fair use of
the fictional work. We must also decide questions concerning the scope of trademark protection for literary titles and
several issues concerning copyright damages.
The issues arise on the appeal of defendants Publications International, Ltd. ("PIL"), Louis N. Weber, Scott
Knickelbine, and Penguin USA, Inc. and the cross-appeal of plaintiff Twin Peaks Productions, Inc. ("TPP") from the
July 29, 1992, judgment of the District Court for the Southern District of New York (John S. Martin, Jr., Judge)
finding that the defendants' book infringed copyrights in the scripts for several episodes of the television program
"Twin Peaks" and also infringed the trademark TWIN PEAKS. 778 F.Supp. 1247 (1991). The judgment enjoined
publication of the book and use of the trademark, and awarded damages and attorney's fees totaling nearly
$280,000. We affirm as to copyright liability, vacate and remand as to trademark liability, affirm as to copyright
damages, and vacate and remand as to attorney's fees.
Background
"Twin Peaks" premiered on ABC in April 1990. The first eight episodes received high ratings--up to a third of the
nation's television viewers--and extensive positive press coverage. See William Grimes, Welcome to Twin Peaks and
Valleys, N.Y. Times, May 5, 1991, § 2, at 1. The second season of the show was far less successful, leading to its
cancellation in June 1991. The producer of the show, TPP (formerly Lynch/Frost Productions) obtained copyright
registrations and owns the unregistered trademark TWIN PEAKS.
In October 1990, PIL published "Welcome to Twin Peaks: A Complete Guide to Who's Who and What's What" ("the
Book"), based on the first eight episodes. The 128-page book has seven chapters, dealing with, respectively, (1) the
popularity of the show; (2) the characters and the actors who play them; (3) the plots of the eight episodes, some
commentary on the plots, and "unanswered questions"; (4) David Lynch, the creator of the show; (5) Mark Frost,
the producer of the show, and Snoqualmie, Washington, the location of the show; (6) the music of the show; and
(7) trivia questions and quotations constituting the "wit and wisdom of Agent Cooper," one of the characters. The
cover of the book contains a disclaimer, indicating that PIL is not affiliated with Lynch/Frost Productions, ABC, and
various other entities. The book was written by defendant Scott Knickelbine and distributed by defendant Penguin
USA, Inc., under its SIGNET imprint. Defendant Louis N. Weber is the president of PIL.
Upon publication, PIL was threatened with a copyright action by Simon & Schuster, which holds certain book rights
to the "Twin Peaks" programs. PIL responded by instituting a declaratory judgment action against Simon & Schuster
in the Northern District of Illinois. TPP made its own demand that PIL cease production of the Book, and PIL
amended its complaint in the declaratory judgment action to add TPP as a defendant. TPP moved successfully to
dismiss the action against it for lack of personal jurisdiction. See Publications International, Ltd. v. Simon & Schuster,
Inc., 763 F.Supp. 309 (N.D.Ill.1991). The litigation between PIL and Simon & Schuster was settled in February 1991
by an agreement allowing PIL to continue publication of the Book with certain modifications.
TPP then filed the instant action in the Southern District of New York, alleging copyright infringement, trademark
infringement, unfair competition, and trademark dilution. The parties cross-moved for summary judgment on
liability, stipulating that there were no disputed issues of fact. The District Court found for TPP on the copyright,
trademark, and unfair competition claims, and for PIL on the trademark dilution claim. The Court rejected fair use
and First Amendment defenses asserted by PIL. The parties then agreed to submit the damages issues on papers,
but PIL subsequently requested an evidentiary hearing limited to the issue of willfulness. Following this hearing, the
District Court determined that PIL had willfully infringed TPP's copyrights. The Court enjoined further copyright or
trademark violations, and awarded TPP the following damages: (1) against PIL, either statutory damages of
$120,000 or actual damages (based on a reasonable royalty) of $125,000, at TPP's option; (2) against Penguin,
$26,584, constituting Penguin's profits; (3) against Knickelbine, $3,000, constituting his profits; and (4) against PIL,
$130,324.25 in attorney's fees, constituting TPP's fees in both the Illinois and New York actions. The Court also
determined that PIL's profits were $52,108, but declined to award this sum in addition to statutory damages or a
reasonable royalty.
On appeal, PIL attacks the findings of copyright and trademark liability, the finding of willfulness, several aspects of
the calculation of damages, and the award of attorney's fees. In its cross-appeal, TPP contends that it should have
been awarded PIL's profits in addition to actual damages. TPP also seeks to recover fees expended on this appeal.
Discussion
I. Copyright Liability
Initially, we note some confusion in TPP's identification of the works alleged to be infringed. The complaint alleges
copying of "the Program," a phrase used in the complaint to mean the "television series entitled 'Twin Peaks.' "
There is no claim in the complaint that the videotapes of the episodes as televised were ever registered. Judge
Martin's opinion granting summary judgment found infringement of the copyright in the teleplays (scripts), but the
injunction prohibits infringing the copyrights in the "program." At oral argument in this Court, in response to
a question, TPP said that copyright registrations had been obtained only for the teleplays. However, in a post-
argument submission, TPP sought to correct that response. TPP asserted that a copyright registration had been
obtained for the script of the first episode, that copyright registrations had been obtained for the televised
videotapes of the seven subsequent episodes, and that a separate copyright registration had later been obtained for
the televised videotape of the first episode. As the ensuing discussion reveals, our disposition of the copyright issues
is ultimately unaffected whether TPP's registrations apply to the teleplays, to the televised episodes, or, as alleged
for the first episode, to both the teleplay and the televised episode.
A. Prima facie copyright liability
PIL first makes several related attacks on the District Court's determination that, at least absent a fair use or First
Amendment defense, PIL infringed TPP's copyrights. To make out a prima facie case of copyright liability, the
copyright holder must prove "ownership of a valid copyright, and ... copying of constituent elements of the work that
are original." Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340, ----, 111 S.Ct. 1282, 1296, 113
L.Ed.2d 358 (1991). The plaintiff may establish copying either by direct evidence or by showing that the defendant
had access to the plaintiff's work and that the two works are substantially similar. See Novelty Textile Mills, Inc. v.
Joan Fabrics Corp., 558 F.2d 1090, 1092 (2d Cir.1977).1 PIL contends that the District Court erred in finding that PIL
had access to the teleplays, that substantial similarity existed between the Book and the teleplays, and that the Book
was a derivative work of the teleplays.
1. Access. PIL argues that because there is no evidence that it had access to the teleplays, TPP's infringement claim
fails as a matter of law. Yet PIL has conceded that it had access to the broadcast programs, and does not dispute
that the broadcast programs contained virtually all of the protected expression in the teleplays. In isolated instances,
dialogue quoted in the Book varies slightly from dialogue as set forth in the teleplays, presumably resulting from
variations that occurred in the course of making the television programs, but these instances are insignificant. One
who views a performance of a copyrighted work and copies expression contained in that work may be found to have
infringed. See 1 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 2.03[C], at 2-32 (1992) (hereafter
"Nimmer"). In the circumstances of this case, we hold that PIL's access to the televised programs serves as the
functional equivalent of access to the protectable content of the teleplays. Thus, if, as the District Court thought,
TPP's registrations applied to the teleplays, access was adequately shown. Alternatively, if, as TPP now alleges,
registrations were obtained for the televised episodes, access is undisputed.
2. Substantial similarity. PIL next argues that the District Court erroneously applied a "literal similarity" test instead
of a "substantial similarity" test in concluding that the Book copied the teleplays. We find no error. PIL fails to
recognize that the concept of similarity embraces not only global similarities in structure and sequence, but localized
similarity in language. In both cases, the trier of fact must determine whether the similarities are sufficient to qualify
as substantial. See 3 Nimmer § 13.03[A], at 13-28 to 13-29 (1992) (substantial similarity can take the form of
"fragmented literal similarity" or "comprehensive nonliteral similarity"). In this case, two chapters of the Book
(chapters 3 and 7) consist of extensive direct quotations from the teleplays. Indeed, PIL concedes that 89 lines of
dialogue were taken. TPP claims that a far greater amount was taken. But even on PIL's concession, the District
Court was entitled to find that the identity of 89 lines of dialogue between the works constituted substantial
similarity. See Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 548, 105 S.Ct. 2218, 2224, 85
L.Ed.2d 588 (1985) (finding substantial similarity where defendant's work excerpted 300-400 words including some
uncopyrightable material).
Moreover, while the District Court confined its inquiry to literal similarity, we have little doubt that the record
supports a finding of substantial similarity through comprehensive nonliteral similarity. Chapter 3 of the Book is
essentially a detailed recounting of the first eight episodes of the series. Every intricate plot twist and element of
character development appear in the Book in the same sequence as in the teleplays. The elaborate recounting of
plot details consumes 46 pages of Chapter 3. The degree of detail is illustrated by excerpts set out in the margin.
3. Infringement of the right to make derivative works. PIL further contends that the District Court erred in finding
that the Book infringed not only rights in the teleplays but also the right to make derivative works of the teleplays.
The finding that the Book was a derivative work would seem unnecessary to the finding of prima facie infringement.
See 2 Nimmer § 8.09[A], at 8-114 (right to make derivative works is "completely superfluous," since infringement of
the adaptation right necessarily infringes the reproduction right or the performance right). Nevertheless, we believe
the District Court was correct in determining that the Book constituted a "derivative work[ ] based upon the
copyrighted work." 17 U.S.C. § 106(2) (1988). The Book contains a substantial amount of material from the
teleplays, transformed from one medium into another. See Rogers v. Koons, 751 F.Supp. 474, 477 (S.D.N.Y.1990),
aff'd, 960 F.2d 301 (2d Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 365, 121 L.Ed.2d 278 (1992).
B. Fair use
The central issue on the copyright claim is the fair use defense. This long-standing doctrine tempers the protection
of copyright by allowing an author to use a limited amount of copyrighted material under some circumstances. Since
1978, the doctrine has been codified in section 107 of the Copyright Act, 17 U.S.C. § 107 (1988 & Supp. III 1991),
which provides that "the fair use of a copyrighted work, ... for purposes such as criticism, comment, news reporting,
teaching ..., scholarship, or research, is not an infringement of copyright." In determining whether a use is fair, a
court is to consider four enumerated factors, see id. § 107(1)-(4),3 although these factors are non-exclusive, see
Harper & Row, 471 U.S. at 560, 105 S.Ct. at 2230.
Judge Martin applied each of the four statutory factors and found that all of them favored TPP. He thought that the
Book was not entitled to favorable consideration as having either an educational purpose or a character as
commentary, that the teleplays were creative works entitled to heightened protection, that substantial copyrighted
material was taken, and that the Book competed with books currently licensed by TPP as well as possible future
derivative works. Because "[f]air use is a mixed question of law and fact," Harper & Row, 471 U.S. at 560, 105 S.Ct.
at 2230, the District Court's conclusion "is open to full review on appeal," New Era Publications International, ApS v.
Carol Publishing Group, 904 F.2d 152, 155 (2d Cir.), cert. denied, 498 U.S. 921, 111 S.Ct. 297, 112 L.Ed.2d 251
(1990), although subsidiary findings of fact will be upheld unless clearly erroneous, see Fed.R.Civ.P. 52(a).
We agree with the appellants that the Book serves one or more of the non-exclusive purposes that section 107
identifies as examples of purposes for which a protected fair use may be made. See Harper & Row, 471 U.S. at 561,
105 S.Ct. at 2231. Though it might be extravagant to consider the Book a work of "research" or "scholarship," it is
surely a work of "comment," and perhaps has some claim to "criticism" and "news reporting." It is a work of and
about pop culture, but that does not remove it from the scope of section 107. Courts must be alert to the risk of
permitting subjective judgments about quality to tilt the scales on which the fair use balance is made. A comment
about a television program is no less entitled to the defense of fair use because its subject is a program of mass
appeal and the author aims his comment at a lowbrow audience. A comment is as eligible for fair use protection
when it concerns "Masterpiece Theater" and appears in the New York Review of Books as when it concerns "As the
World Turns" and appears in Soap Opera Digest. And the defense will be available whether the comment makes
some erudite point appreciated mainly by students of literature or a more prosaic point of interest to average
television viewers. The issue in either case will ultimately be whether the comment, in borrowing the protected
expression of the original work, does so for purposes that advance the interests sought to be promoted by the
copyright law. Determination of that issue turns on careful consideration of the four statutory factors.
1. Purpose and character of the use. The District Court's analysis of purpose and character was limited to a
determination that PIL's purpose was commercial and not educational. Though we ultimately assess the first factor
as favoring TPP, a more extended analysis is warranted.
"Purpose" in fair use analysis is not an all-or-nothing matter. The issue is not simply whether a challenged work
serves one of the non-exclusive purposes identified in section 107, such as comment or criticism, but whether it does
so to an insignificant or a substantial extent. The weight ascribed to the "purpose" factor involves a more refined
assessment than the initial, fairly easy decision that a work serves a purpose illustrated by the categories listed in
section 107.
The statutory language of the first factor plainly assigns a higher value to a use that serves "nonprofit educational
purposes" than to one of a "commercial nature." Yet we do not think that an author's commercial purpose in writing
a book precludes a finding that his particular use of a prior author's protected expression serves a purpose that
weighs favorably on the fair use scales. Most publishers of traditional "educational" works hope to make a profit, and
in many cases, including this one, publishers of traditional "commercial" work have at least the pretense and often
the reality of enlightening the public. See Salinger v. Random House, Inc., 811 F.2d 90, 96 (2d Cir.), cert. denied,
484 U.S. 890, 108 S.Ct. 213, 98 L.Ed.2d 177 (1987).
We have found fair use in works that are plainly "commercial." See Consumers Union of United States, Inc. v.
General Signal Corp., 724 F.2d 1044, 1049 (2d Cir.1983) (advertisement disclosing Consumer Reports
recommendation), reh'g denied, 730 F.2d 47 (2d Cir.), cert. denied, 469 U.S. 823, 105 S.Ct. 100, 83 L.Ed.2d 45
(1984); Warner Bros., Inc. v. American Broadcasting Companies, Inc., 720 F.2d 231, 242 (2d Cir.1983) (television
series parodying Superman); Elsmere Music, Inc. v. National Broadcasting Co., 623 F.2d 252, 253 n. 1 (2d Cir.1980)
(Saturday Night Live skit parodying "I Love New York" song); Berlin v. E.C. Publications, Inc., 329 F.2d 541, 544-45
(2d Cir.) (Mad Magazine parodies of Irving Berlin songs), cert. denied, 379 U.S. 822, 85 S.Ct. 46, 13 L.Ed.2d 33
(1964). But see Consumers Union, 730 F.2d at 48 (Oakes, J., dissenting from denial of rehearing in banc)
(contending that advertising use is never proper purpose). However, we have also rejected a fair use defense for
works that could be characterized as "commercial exploitation." See Iowa State University Research Foundation, Inc.
v. American Broadcasting Companies, Inc., 621 F.2d 57, 61 (2d Cir.1980) (ABC telecasts containing portions of film
on wrestler were "commercial exploitation"); Meeropol v. Nizer, 560 F.2d 1061, 1069 (2d Cir.1977) (summary
judgment inappropriate since book containing Rosenberg letters could constitute "commercial exploitation"), cert.
denied, 434 U.S. 1013, 98 S.Ct. 727, 54 L.Ed.2d 756 (1978). Whether "exploitation" is an analytically useful term or
only a label attached to works deemed not protected by the fair use defense is debatable. We have been more
solicitous of the fair use defense in works, which though intended to be profitable, aspired to serve broader public
purposes. See Wright v. Warner Books, Inc., 953 F.2d 731, 736-37 (2d Cir.1991) (biography); New Era Publications
International, ApS v. Carol Publishing Group, 904 F.2d at 156-57 (biography); Maxtone-Graham v. Burtchaell, 803
F.2d 1253, 1260-62 (2d Cir.1986) (scholarly book on attitudes toward abortion), cert. denied, 481 U.S. 1059, 107
S.Ct. 2201, 95 L.Ed.2d 856 (1987); Rosemont Enterprises, Inc. v. Random House, Inc., 366 F.2d 303, 307-09 (2d
Cir.1966) (biography), cert. denied, 385 U.S. 1009, 87 S.Ct. 714, 17 L.Ed.2d 546 (1967).
PIL's use of the protected expression in the teleplays consists primarily of summarizing in great detail the plots of
the first eight episodes. Inevitably, some identification of the subject matter of a writing must occur before any
useful comment may be made about it, and it is not uncommon for works serving a fair use purpose to give at least
a brief indication of the plot. Works of criticism, teaching, and news reporting customarily do so. In identifying plot,
the author of the second work may or may not be said to have made what Judge Leval has usefully called a
"transformative" use. See Pierre N. Leval, Toward a Fair Use Standard, 103 Harv.L.Rev. 1105, 1111 (1990). Such
use would occur, for example, if a plot was briefly described for purposes of adding significant criticism or comment
about the author's plotting technique.
In the pending case, PIL's detailed report of the plots goes far beyond merely identifying their basic outline for the
transformative purposes of comment or criticism. What PIL has done is simply to recount for its readers precisely the
plot details of each teleplay. Whether such a detailed summary serves a purpose that weighs in favor of fair use
requires some consideration of a genre often called "abridgments."
Recognized in the Copyright Act as a form of "derivative work," see 17 U.S.C. § 101 (1988), an abridgment is a
"condensation; contraction. An epitome or compendium of another and larger work, wherein the principal ideas of
the larger work are summarily contained." 1 Bouvier's Law Dictionary 91 (3d rev. 1914). Interestingly, the origin of
the fair use doctrine is closely connected to abridgments, and early cases went so far as to suggest that an
abridgment always constitutes fair use, at least one that is "a real and fair abridgment" displaying "the invention,
learning, and judgment" of the abridger, and not merely an instance of a work that has been "colourably shortened."
See Gyles v. Wilcox, 26 Eng.Rep. 489, 490, 2 Atk. 141, 143 (1740) (No. 130).
The leading early American decision on the fair use defense, Folsom v. Marsh, 9 F.Cas. 342 (C.C.D.Mass.1841),
concerned the publication of George Washington's letters in a scholarly work. Justice Story wrote that "a fair and
bona fide abridgment of an original work, is not a piracy of the copyright of the author," and that to constitute an
abridgment, the second work must contain "real, substantial condensation of the materials, and intellectual labor
and judgment bestowed thereon; and not merely the facile use of the scissors; or extracts of the essential parts,
constituting the chief value of the original work." Id. at 345. In concluding, with an expression of regret, that the
copyright in Washington's letters had been infringed, Justice Story noted that "[i]f it had been the case of a fair and
bona fide abridgment of the work of the plaintiffs, it might have admitted of a very different consideration." Id. at
349.
Despite these historically interesting suggestions, it is no longer the law that a "real and fair abridgment" is always
fair use. As early as 1911, the Circuit Court for the Southern District of New York indicated in dictum its readiness to
enjoin an abridgment of a copyrighted work. In declining to issue a preliminary injunction against publication of
defendant's book "Opera Stories," which included very brief summaries of two of plaintiff's copyrighted operas, the
Court relied on the fact that the summaries gave only a "vague, fragmentary and superficial idea of the plot and of
the characters," G. Ricordi & Co. v. Mason, 201 F. 182, 182 (C.C.S.D.N.Y.1911), aff'd, 210 F. 277 (2d Cir.1913), and
further indicated that [i]f this case involved an abridgment as that word is ordinarily understood, I should be inclined
to take a different view of this motion. The defendants' "story," however, is not such an abridgment. The
abridgments which have been condemned by the courts involve colorable shortening of the original text, where
immaterial incidents are omitted and voluminous dissertations are cut down, but where the characters, the plot, the
language and the ideas of the author are pirated.
Id. at 183 (emphasis in original). See also G. Ricordi & Co. v. Mason, 201 F. 184 (S.D.N.Y.1912) (denying permanent
injunction), aff'd, 210 F. 277 (2d Cir.1913). One of the leading commentators on the fair use doctrine attributes the
"condemnation" of abridgments to the adoption of the 1909 Copyright Act, which "abolished the right to make
unconsented fair abridgments." William F. Patry, The Fair Use Privilege in Copyright Law 27 (1985); see also id. at
26 (expressing disagreement with early rule permitting abridgments).
The current Copyright Act confers no absolute right on non-copyright holders to make abridgments. The Act defines
a "derivative work" to include an abridgment, 17 U.S.C. § 101 (1988), and gives the copyright holder the exclusive
right "to prepare derivative works based upon the copyrighted work," id. § 106(2) (1988 & Supp. III 1991). An
abridgment of a copyrighted work is thus likely to be found to be prima facie infringing. Where, as here, the
abridgment serves no transformative function and elaborates in detail far beyond what is required to serve any
legitimate purpose, the first factor cannot be weighted in favor of the fair use defense.
2. Nature of the copyrighted work. PIL attacks only briefly the District Court's finding that, because the copyrighted
work is a work of fiction, the second factor favors TPP. PIL seems to contend that the magnitude of public reaction
to the televised programs made the entire content of the teleplays a fact that could be reported and analyzed. Yet
the second factor, if it favors anything, must favor a creative and fictional work, no matter how successful. See
Stewart v. Abend, 495 U.S. 207, 237-38, 110 S.Ct. 1750, 1768-69, 109 L.Ed.2d 184 (1990); Harper & Row, 471 U.S.
at 563, 105 S.Ct. at 2133; 3 Nimmer § 13.05[A], at 13-102.22 & n. 28.7.
3. Amount and substantiality of the portion used in relation to the copyrighted work as a whole. PIL erroneously
claims that the District Court made no finding of substantiality "in relation to the teleplays or the television series as
a whole." Brief for Appellant at 26. In fact, the District Court found that the Book "provides synopses for several
episodes, lifting many parts verbatim from the script." Even without this finding, the District Court's determination
that the Book was substantially similar to the teleplays so as to be prima facie infringing should suffice for a
determination that the third fair use factor favors the plaintiff, whether the copyrighted works are the teleplays or
the videotapes. See 3 Nimmer § 13.05[A], at 13-102.24 to 13-102.25 (third prong of fair use inquiry is redundant).
PIL also argues that its taking is not great in light of the fact that critical commentary often requires lifting large
portions of the original work. Even if that is sometimes so, it does not mean that the third factor favors commenters
regardless of the amount of copying. What PIL lifted was plainly substantial in relation to the copyrighted works as a
whole.
4. Effect of the use upon the potential market for or value of the copyrighted work. The fourth factor, market effect,
is "undoubtedly the single most important element of fair use." Harper & Row, 471 U.S. at 566, 105 S.Ct. at 2233. In
evaluating this factor, a court must consider not only the primary market for the copyrighted work, but the current
and potential market for derivative works. See id. at 568, 105 S.Ct. at 2234; Lewis Galoob Toys, Inc. v. Nintendo of
America, Inc., 964 F.2d 965, 971 (9th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1582, 123 L.Ed.2d 149 (1993).
We believe that application of this factor presents a fairly close question, but ultimately, we agree with the District
Court that the factor favors TPP.
In the cases where we have found the fourth factor to favor a defendant, the defendant's work filled a market niche
that the plaintiff simply had no interest in occupying. Copyright holders rarely write parodies of their own works, see,
e.g., Warner Bros., 720 F.2d at 242-43, or write reviews of them, see Harper & Row, 471 U.S. at 584, 105 S.Ct. at
2242, and are even less likely to write new analyses of their underlying data from the opposite political perspective,
see, e.g., Maxtone-Graham, 803 F.2d at 1263-64. On the other hand, it is a safe generalization that copyright
holders, as a class, wish to continue to sell the copyrighted work and may also wish to prepare or license such
derivative works as book versions or films. In this case, the Book may interfere with the primary market for the
copyrighted works and almost certainly interferes with legitimate markets for derivative works. It is possible that a
person who had missed an episode of "Twin Peaks" would find reading the Book an adequate substitute, and would
not need to rent the videotape of that episode in order to enjoy the next one. See Wainwright Securities, Inc. v. Wall
Street Transcript Corp., 558 F.2d 91, 96 (2d Cir.1977) (defendant's abstracts filled demand for plaintiff's financial
reports), cert. denied, 434 U.S. 1014, 98 S.Ct. 730, 54 L.Ed.2d 759 (1978). In the derivative market, TPP has
already licensed at least two "Twin Peaks" books ("The Secret Diary of Laura Palmer" and "The Autobiography of
F.B.I. Special Agent Dale Cooper: My Life, My Tapes"), and states that it plans to license more, or at least claims to
have had such plans before the show's popularity subsided. A copyright holder's protection of its market for
derivative works of course cannot enable it to bar publication of works of comment, criticism, or news reporting
whose commercial success is enhanced by the wide appeal of the copyrighted work. The author of "Twin Peaks"
cannot preserve for itself the entire field of publishable works that wish to cash in on the "Twin Peaks" phenomenon.
But it may rightfully claim a favorable weighting of the fourth fair use factor with respect to a book that reports the
plot in such extraordinary detail as to risk impairment of the market for the copyrighted works themselves or
derivative works that the author is entitled to license.
Though appellants may be correct in arguing that works like theirs provide helpful publicity and thereby tend to
confer an economic benefit on the copyright holder, we nevertheless conclude that the Book competes in markets in
which TPP has a legitimate interest, and that the fourth factor at least slightly favors TPP.
5. Aggregate fair use assessment. While the four statutory factors are non-exclusive, we do not believe that the
various other factors discussed by the parties merit discussion in light of our agreement with the District Court that
all of the statutory factors favor TPP. We conclude that the Court's rejection of the fair use defense was entirely
correct.
C. First Amendment defense
PIL contends briefly that the First Amendment is broader than the fair use defense and protects its publication of the
Book. PIL neither describes the contours of this purported defense nor makes any effort to distinguish our numerous
cases that have held that, except perhaps in an extraordinary case, "the fair use doctrine encompasses all claims of
first amendment in the copyright field," New Era Publications International, ApS v. Henry Holt and Co., 873 F.2d 576
(2d Cir.1989), cert. denied, 493 U.S. 1094, 110 S.Ct. 1168, 107 L.Ed.2d 1071 (1990); see also Roy Export Co.
Establishment of Vaduz, Liechtenstein v. Columbia Broadcasting System, Inc., 672 F.2d 1095, 1099-1100 (2d Cir.),
cert. denied, 459 U.S. 826, 103 S.Ct. 60, 74 L.Ed.2d 63 (1982); Wainwright Securities, 558 F.2d at 95. This is not
the extraordinary case. Whatever non-protectable information PIL seeks to disseminate is hardly inseparable from
TPP's copyrighted expression, as perhaps was the case with the Zapruder film of the Kennedy assassination. See Roy
Export, 672 F.2d at 1099-1100 & n. 8; Time, Inc. v. Bernard Geis Associates, 293 F.Supp. 130 (S.D.N.Y.1968). The
First Amendment defense was properly rejected.
II. Trademark Liability
The District Court concluded that notwithstanding PIL's disclaimer, "a substantial number of reasonably prudent
purchasers, on seeing the name Twin Peaks as part of the title of the Book would be led to believe that plaintiff was
the source of the goods." Accordingly, the District Court found that PIL had violated section 43(a) of the Lanham
Act, 15 U.S.C. § 1125(a) (1988), and had engaged in unfair competition in violation of New York common law. PIL
contends that reversal is required because the District Court failed to find that the TWIN PEAKS mark had a
secondary meaning or to apply any of the Polaroid factors, see Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d
492, 495 (2d Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961). PIL also contends that independent
analysis of these factors supports the conclusion that it did not infringe TPP's trademarks. The parties agree that the
resolution of the common law unfair competition claim parallels resolution of the trademark claim. While PIL's point
concerning the failure to apply the Polaroid factors has validity, we are also concerned that the District Court failed
to recognize the special concerns implicated by Lanham Act claims against titles of works of artistic expression.
A. Secondary meaning
The District Court made no explicit determination that TWIN PEAKS had acquired secondary meaning. We need not
determine whether such a showing is required for suggestive literary titles,4 since the stipulated facts would have
required the District Court to find secondary meaning. TPP submitted extensive evidence of the publicity received by
the televised episodes, and even PIL concedes that the series was a "media phenomenon." Much of this publicity
focused on David Lynch and Mark Frost. Thus "the title is sufficiently well known that consumers associate it with a
particular author's work." Rogers v. Grimaldi, 875 F.2d 994, 998 (2d Cir.1989).
B. Trademark infringement by literary titles
Because of an author's significant First Amendment interest in choosing an appropriate title for his or her work, we
have held that literary titles do not violate the Lanham Act "unless the title has no artistic relevance to the
underlying work whatsoever, or, if it has some artistic relevance, unless the title explicitly misleads as to the source
or the content of the work." Rogers v. Grimaldi, 875 F.2d at 999 (footnote omitted). Although Rogers arose in the
context of a title using a celebrity's name, we have applied it to the literary title "Cliffs Notes," a literary title
apparently not containing the name of a real person, and certainly not of a celebrity. See Cliffs Notes, Inc. v. Bantam
Doubleday Dell Publishing Group, Inc., 886 F.2d 490, 495 (2d Cir.1989) ("[T]he Rogers balancing approach is
generally applicable to Lanham Act claims against works of artistic expression....").
In this case, there would seem little question that the title is of some artistic relevance to the Book. The question
then is whether the title is misleading in the sense that it induces members of the public to believe the Book was
prepared or otherwise authorized by TPP.5 This determination must be made, in the first instance, by application of
the venerable Polaroid factors. See Cliffs Notes, 886 F.2d at 495 n. 3. However, the finding of likelihood of confusion
must be particularly compelling to outweigh the First Amendment interest recognized in Rogers.
Unfortunately, the District Court did not apply the Polaroid factors individually or determine whether the likelihood of
confusion was so great as to overcome the presumption of Rogers. While we have occasionally endeavored to apply
at least some of the Polaroid factors at the appellate level, see Orient Express Trading Co. v. Federated Department
Stores, Inc., 842 F.2d 650, 654-55 (2d Cir.1988); Charles of the Ritz Group Ltd. v. Quality King Distributors, Inc.,
832 F.2d 1317, 1320-23 (2d Cir.1987), we believe the better course in this case is a remand to allow the District
Court the opportunity to fully examine the factors relevant to likelihood of confusion.
The need for careful application of the Polaroid factors, assessed in light of Rogers, is underscored by two
complicating considerations. The first is PIL's placement of a disclaimer on both the front and rear covers of the
Book. See Home Box Office, Inc. v. Showtime/The Movie Channel, Inc., 832 F.2d 1311, 1315-16 (2d Cir.1987);
Consumers Union of United States, Inc. v. General Signal Corp., 724 F.2d 1044, 1053 (2d Cir.1983) (injunction not
available "where there is any possibility that an explanation or disclaimer will suffice"), cert. denied, 469 U.S. 823,
105 S.Ct. 100, 83 L.Ed.2d 45 (1984). Though the disclaimer partially blunts TPP's attack by alerting readers that the
Book has not been licensed by a group of pertinent entities including Capital Cities/ABC, Inc. Television Network
Group, it would have been far more effective had it simply stated that the publication has not been prepared,
approved, or licensed by any entity that created or produced the well-known TV program "Twin Peaks." Judge
Martin expressed the view, without elaboration, that the disclaimer was not "effective."
The second special consideration bearing on the Book's title concerns the wording and appearance of the title. The
title not only uses the name "Twin Peaks" but precedes the name with the phrase "Welcome to." The title thus
copies a legend that appears on a roadside sign in the introduction sequence of each televised episode. Moreover,
the book title is presented against a background that appears to be a wooden slab, apparently an attempt to evoke
the wooden roadside sign. It is a fair question whether a title that might otherwise be permissible under Rogers
violates the Lanham Act when displayed in a manner that conjures up a visual image prominently associated with
the work bearing the mark that was copied.
These circumstances make a remand especially appropriate.6 Since TPP concedes that the resolution of the state
law unfair competition claim follows trademark infringement liability, we vacate the District Court's determination
that PIL engaged in unfair competition as well.
III. Copyright Damages
Under the Copyright Act, the copyright holder may elect between two measures of damages, 17 U.S.C. § 504(a)
(1988)--actual damages and profits, id. § 504(b), or statutory damages of between $500 and $20,000 for "all
infringements ... with respect to any one work," id. § 504(c)(1). The District Court determined that actual damages
under section 504(b) were $125,000 and that statutory damages under section 504(c) were $120,000 (apparently
$15,000 for infringement of each of eight teleplays). The District Court also found that PIL's profits were $52,108,
but declined to add this amount to the award under section 504(b). PIL challenges the amount of both the statutory
award and the actual damages award. TPP seeks to uphold the statutory award and cross-appeals to seek an
increase in the actual damages, contending that PIL's profits should have been included.
A. Damages issues open on appeal
Though the parties have disputed on appeal issues relating to both actual and statutory damages, we conclude that
TPP's exercise of its right to elect statutory damages against PIL has eliminated from the case all issues concerning
actual damages recoverable from PIL. The election available to a plaintiff by section 504(a) is to be made "at any
time before final judgment is rendered." 17 U.S.C. § 504(c)(1). In this case, TPP made its choice before final
judgment, apparently believing that the statutory award of $120,000 was more likely to be sustained on appeal than
the actual damages award of $125,000. We do not think the election continues into the appellate stage. Once a
plaintiff has elected statutory damages, it has given up the right to seek actual damages and may not renew that
right on appeal by cross-appealing to seek an increase in the actual damages.
We do not regard Oboler v. Goldin, 714 F.2d 211, 212-13 (2d Cir.1983), as indicating a contrary rule. In that case,
the plaintiff had not elected between remedies prior to judgment, id. at 213, and we therefore permitted it, after
remand, to make its choice. But even in that situation, we obliged the plaintiff to choose between statutory damages
and a new trial on actual damages; we did not permit the plaintiff, after appeal, to pursue both remedies to a
conclusion and then select the one that ultimately proved more favorable.
B. Statutory damages
1. Number of violations. In calculating statutory damages, the District Court apparently concluded that TPP had
violated eight separate copyrights--one for each teleplay--and awarded statutory damages of $15,000 per teleplay,
for a total of $120,000. Had the District Court not considered eight separate works to have been infringed, statutory
damages would have been limited to $20,000 for a non-willful violation and $100,000 for a willful violation. See 17
U.S.C. § 504(c) (1988). Section 504(c) provides for statutory damages "for all infringements involved in the action,
with respect to any one work," and further provides that for "purposes of this subsection, all the parts of a
compilation or derivative work constitute one work." PIL concedes that each teleplay was separately copyrighted, but
contends that they constitute a single work under section 504(c). Presumably, PIL's contention would be asserted
whether TPP had registered eight teleplays, as the District Court thought, or eight videotapes of episodes, as TPP
now asserts.
We last considered the appropriate unit for statutory copyright damages in a case decided under the 1909 Act,
Robert Stigwood Group Ltd. v. O'Reilly, 530 F.2d 1096 (2d Cir.), cert. denied, 429 U.S. 848, 97 S.Ct. 135, 50 L.Ed.2d
121 (1976) ("Stigwood "), which concerned the musical "Jesus Christ Superstar." Under the 1909 Act, statutory
damages were available for "each infringement that was separate." Id. at 1102; see L.A. Westermann Co. v.
Dispatch Printing Co., 249 U.S. 100, 105-06, 39 S.Ct. 194, 195-96, 63 L.Ed. 499 (1919). The current statute shifts
the unit of damages inquiry from number of infringements to number of works. Stigwood may retain some relevance
under the 1976 Act in its recognition that three songs performed in the musical would support separate statutory
damages awards, but that three "overlapping copyrights on substantial parts of the entire work" would support only
a single award, Stigwood, 530 F.2d at 1104 (emphasis in original). The three copyrights thought to be "overlapping"
were identified as covering "Musical Excerpts Complete Libretto," "Libretto," and "Vocal Score." Id.
The eight teleplays for "Twin Peaks" represent a current television genre in which one or more plots continue from
one episode to another. The style was popularized by the police series "Hill Street Blues" and is still in vogue in the
lawyers series "L.A. Law." "Twin Peaks" carried the style to its limit by keeping the point of the basic plot (Who killed
Laura?) continuing throughout the first season of the series, beyond the eight episodes at issue in this litigation.
Whatever the scope of the Stigwood ruling concerning "overlapping" copyrights in related components of a single
musical production might be under the 1976 Act, we think it has no application to separately written teleplays
prepared to become episodes of a weekly television series. The author of eight scripts for eight television episodes is
not limited to one award of statutory damages just because he or she can continue the plot line from one episode to
the next and hold the viewers' interest without furnishing a resolution. We might well have a different situation if a
book written as a single work was then adapted for television as a group of episodes, for example, the six-part
television adaptations of John LeCarre's "Tinker, Tailor, Soldier, Spy" and "Smiley's People." Even in such
circumstances, though there would be but one book infringed, there might be separate awards for infringement of
each televised episode. In any event, ours is the easy case of infringement of eight separate works that warrants
eight statutory awards, whether the registrations apply to the teleplays or the televised episodes.
PIL's reliance on Sid & Marty Krofft Television Productions, Inc. v. McDonald's Corp., 221 U.S.P.Q. 114, 1983
Copyright L. Dec. (CCH) p 25,572 (C.D.Cal.1983), is unavailing. Though the plaintiff sought multiple statutory
awards for infringement of seven copyrights, the District Court ruled that what the defendant had infringed was the
expression of a single idea, the characters and locale; the fact that the characters and the locale appeared in
successive television episodes did not warrant multiple awards. Here, by contrast, what has been infringed by the
detailed copying of plots are the copyrights in the separately written and copyrighted teleplays or programs.
2. Willfulness. With respect to statutory damages, PIL claims that the District Court's finding of willful copyright
infringement was clearly erroneous. The result of the finding of willfulness was to increase the maximum amount of
statutory damages awardable for each copyright violation from $20,000 to $100,000. See 17 U.S.C. § 504(c)(2).
Though the District Court's award of $15,000 for each work infringed is sustainable with or without a finding of
willfulness, we feel obliged to review the challenge to the willfulness finding because it may well have influenced
both the amount of the award and the appropriateness of awarding attorney's fees. See Universal City Studios, Inc.
v. Nintendo Co., 797 F.2d 70, 78 (2d Cir.), cert. denied, 479 U.S. 987, 107 S.Ct. 578, 93 L.Ed.2d 581 (1986).
PIL concedes that it knew of the copyrights, and continued publication after receiving a specific warning, but
contends that it believed in good faith that its actions were lawful. Much of the evidence of willfulness took the form
of disputed accounts of the resolution of previous copyright suits involving PIL. PIL apparently contended in the
District Court that this evidence was inadmissible, but has not pursued this claim on appeal. PIL's counsel also
testified that he had reviewed the manuscript of the Book and believed that it was fair use, although he had not
prepared a written opinion to this effect. TPP developed some of its most damaging evidence through cross-
examination of defendant Louis N. Weber, PIL's president. Weber testified that as a book publisher, he "hadn't
thought about a TV show being copyrighted." The District Court explicitly found this testimony incredible in light of
PIL's substantial litigation history and ruled that PIL "was happy to go as far as they thought they could to use
other's copyrighted material with the view that they could ultimately settle for some minor sanction."
We review the District Court's determination of willfulness for clear error, see Fitzgerald Publishing Co. v. Baylor
Publishing Co., 807 F.2d 1110, 1115 (2d Cir.1986), with particular deference to determinations regarding witness
credibility, see Anderson v. City of Bessemer City, 470 U.S. 564, 575, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518 (1985).
The standard is simply whether the defendant had knowledge that its conduct represented infringement or perhaps
recklessly disregarded the possibility. See Fitzgerald Publishing Co., 807 F.2d at 1115. The District Court rejected
PIL's alternate contentions that it had not thought of copyright infringement or had thought the work was within the
fair use exception. We cannot say that that determination was clear error.
3. Apportionment of profits. Though TPP's election of statutory damages against PIL moots all appellate issues
concerning the calculation of actual damages and profits with respect to PIL, the appellants' claim that profits should
have been apportioned between infringing and non-infringing components of the Book remains viable with respect to
the award of profits of defendants Penguin USA, Inc. and Scott Knickelbine. It is true that "where an infringer's
profits are not entirely due to the infringement, and the evidence suggests some division which may rationally be
used as a springboard it is the duty of the court to make some apportionment." Orgel v. Clark Boardman Co., 301
F.2d 119, 121 (2d Cir.), cert. denied, 371 U.S. 817, 83 S.Ct. 31, 9 L.Ed.2d 58 (1962). However, the burden was on
PIL to present evidence suggesting a rational division, and we review the decision of the District Court that the
defendants did not carry this burden only for clear error. See Business Trends Analysts, Inc. v. Freedonia Group,
Inc., 887 F.2d 399, 407 (2d Cir.1989). As in Business Trends Analysts, the District Court could find that the " 'heavily
infringed' portions were the sections of [the copyrighted works] 'that gave them their value,' " and that the "
'infringed portions are so suffused and intertwined with non-infringing portions as to render [an apportionment]
impossible.' " 887 F.2d at 407 (quoting Business Trends Analysts, Inc. v. Freedonia Group, Inc., 700 F.Supp. 1213,
1241 (S.D.N.Y.1988)).
IV. Attorney's Fees
A. District Court award of attorney's fees
PIL contends that the District Court abused its discretion in awarding substantial attorney's fees to TPP for both the
New York and Illinois actions. PIL claims that TPP did not qualify as a prevailing party in the Illinois action, and that
in the New York action, damages should be apportioned, with reductions for the amount of attorney's fees devoted
to the trademark claim and the portions of the Book that were not infringing. PIL also contends without elaboration
that there was some amount of duplicative billing, but this claim appears not to have been presented in the District
Court.
As to the copyright attorney's fees, we review only for abuse of discretion. See N.A.S. Import, Corp. v. Chenson
Enterprises, Inc., 968 F.2d 250, 253 (2d Cir.1992). The standard for awarding fees is very favorable to prevailing
parties; indeed, " 'fees are generally awarded to a prevailing plaintiff.' " Id. at 254 (quoting Roth v. Pritikin, 787 F.2d
54, 57 (2d Cir.1986)). While we agree with PIL that the award of fees for the Illinois action is somewhat unusual, we
find that it was proper. Had TPP interposed its copyright claims by way of a counterclaim in a single action, it would
have been allowed recovery of all fees. See Rose v. Bourne, Inc., 279 F.2d 79, 81 (2d Cir.), cert. denied, 364 U.S.
880, 81 S.Ct. 170, 5 L.Ed.2d 103 (1960). TPP's decision to seek dismissal of the Illinois action on jurisdictional
grounds and to bring the action in New York can be seen as part of a unified course of action of vindicating its
copyrights. We find no abuse of discretion in the District Court's decision to award copyright fees for both lawsuits.
The trademark attorney's fees, however, stand on a different ground. The relevant statute, 15 U.S.C. § 1117 (1988),
allows recovery of a reasonable attorney's fee only in "exceptional cases." Such fees should be awarded only "on
evidence of fraud or bad faith." See Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1014 (9th
Cir.1985), cert. denied, 474 U.S. 1059, 106 S.Ct. 802, 88 L.Ed.2d 778 (1986). While a finding of bad faith and a
decision to award trademark fees is ordinarily reviewed only for abuse of discretion, see George Basch Co. v. Blue
Coral, Inc., 968 F.2d 1532, 1542-43 (2d Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 510, 121 L.Ed.2d 445 (1992), it
appears that the District Court failed to apply the proper statutory standard. Even apart from our decision to vacate
the District Court's finding of trademark infringement, we see little evidence of "fraud or bad faith" here concerning
the alleged trademark infringement. Accordingly, we vacate the award of attorney's fees to the extent that the fees
related to TPP's prosecution of the trademark claim. On remand, if the trademark claim is pursued and results in a
determination of liability for trademark infringement, the District Court must further determine whether the
infringement satisfies the standard of section 1117. Unless the District Court adheres to its decision to award
attorney's fees on the trademark claim, an appropriate apportionment of fees will be required.
B. Attorney's fees on appeal
Relying both on 17 U.S.C. § 505 (1988) and Fed.R.App.P. 38, TPP contends that it is entitled to recover the fees it
expended in defending this appeal. We reject the request for fees premised on Rule 38, which allows fees and
double costs to be awarded for the bringing of a frivolous appeal. While some of PIL's arguments tread close to the
line, the majority of the arguments made by PIL are substantial, and one is meritorious.
In the circumstances of this case, we also decline to award appellate fees under section 505 of the Copyright Act. It
is true that the prevailing party in a copyright action is ordinarily entitled to fees at the trial level, and that "an award
of attorney's fees may be made for services rendered on appeal as well as at the trial level," 3 Nimmer § 14.10[E],
at 14-129. However, a very substantial fee (even if ultimately reduced somewhat to omit fees for prosecution of the
trademark claim) was awarded at the trial level, and the lawyers in this appeal were familiar with the issues because
they made similar arguments in the District Court. See Russell v. Price, 612 F.2d 1123, 1132 (9th Cir.1979), cert.
denied, 446 U.S. 952, 100 S.Ct. 2919, 64 L.Ed.2d 809 (1980). Exercising our discretion, we decline to assess further
attorney's fees against either party.
Conclusion
We affirm the District Court's decision as to copyright liability, vacate the District Court's decision as to trademark
liability, affirm the award of statutory damages, and vacate the award of attorney's fees. The matter is remanded for
further proceedings consistent with this opinion. Full costs to plaintiff-appellee.
——o0o——
MAI SYSTEMS CORP. v. PEAK COMPUTER, INC., 991 F.2d 511 (9th Cir. 1993)
BEFORE: PREGERSON, BRUNETTI, and FERNANDEZ, Circuit Judges.
Peak Computer, Inc. and two of its employees appeal the district court's order issuing a preliminary injunction
pending trial as well as the district court's order issuing a permanent injunction following the grant of partial
summary judgment.
I. FACTS
MAI Systems Corp., until recently, manufactured computers and designed software to run those computers. The
company continues to service its computers and the software necessary to operate the computers. MAI software
includes operating system software, which is necessary to run any other program on the computer.
Peak Computer, Inc. is a company organized in 1990 that maintains computer systems for its clients. Peak maintains
MAI computers for more than one hundred clients in Southern California. This accounts for between fifty and
seventy percent of Peak's business.
Peak's service of MAI computers includes routine maintenance and emergency repairs. Malfunctions often are
related to the failure of circuit boards inside the computers, and it may be necessary for a Peak technician to operate
the computer and its operating system software in order to service the machine.
In August, 1991, Eric Francis left his job as customer service manager at MAI and joined Peak. Three other MAI
employees joined Peak a short time later. Some businesses that had been using MAI to service their computers
switched to Peak after learning of Francis's move.
II. PROCEDURAL HISTORY
On March 17, 1992, MAI filed suit in the district court against Peak, Peak's president Vincent Chiechi, and Francis.
The complaint includes counts alleging copyright infringement, misappropriation of trade secrets, trademark
infringement, false advertising, and unfair competition.
MAI asked the district court for a temporary restraining order and preliminary injunction pending the outcome of the
suit. The district court issued a temporary restraining order on March 18, 1992 and converted it to a preliminary
injunction on March 26, 1992. On April 15, 1992, the district court issued a written version of the preliminary
injunction along with findings of fact and conclusions of law.
The preliminary injunction reads as follows:
A. Defendants [and certain others] are hereby immediately restrained and enjoined pending trial of this action from:
1. infringing MAI's copyrights in any manner and from using, publishing, copying, selling, distributing or otherwise
disposing of any copies or portions of copies of the following MAI copyrighted computer program packages: "MPx,"
"SPx," "GPx40," and "GPx70" (collectively hereinafter, "The Software");
2. misappropriating, using in any manner in their business including advertising connected therewith, and/or
disclosing to others MAI's trade secrets and confidential information, including, without limitation, The Software,
MAI's Field Information Bulletins ("FIB") and Customer Database;
3. maintaining any MAI computer system, wherein:
(a) "maintaining" is defined as the engaging in any act, including, without limitation, service,
repair, or upkeep in any manner whatsoever, that involves as part of such act, or as a
 preliminary or subsequent step to such act, the use, directly or indirectly, of The Software,
including, without limitation, MAI's operating system, diagnostic, utility, or other software;
(b) "use" is defined as including, without limitation, the acts of running, loading, or causing to be
run or loaded, any MAI software from any magnetic storage or read-only-memory device into
the computer memory of the central processing unit of the computer system; and
(c) "computer system" is defined as an MAI central processing unit in combination with either a
video display, printer, disk drives, and/or keyboard;
4. soliciting any MAI computer maintenance customer pursuant to Francis' employment contracts with MAI;
5. maintaining any contract where customer information was obtained by Francis while employed by MAI pursuant to
Francis' employment contract with MAI;
6. using in any manner in their business, or in advertising connected therewith, directly or indirectly, the trademarks
MAI, BASIC FOUR, and/or MAI Basic Four, the letters MAI (collectively, the "MAI Trademarks") or any mark, word, or
name similar to or in combination with MAI's marks that are likely to cause confusion, mistake or to deceive;
7. committing any act which otherwise infringes any of the MAI Trademarks;
8. advertising, directly or indirectly, that MAI Basic Four is part of Peak's Product line, that Peak has "satellite
facilities," and/or that Peak's technicians are "specifically trained on the latest hardware releases of MAI;" and
9. engaging in any other acts that amount to unfair competition with MAI.
B. IT IS FURTHER ORDERED that Defendants [and certain others] shall hereby, pending trial in this action:
1. provide a full accounting of all MAI property, including all copyrighted works presently in their possession; and
2. retain any fees paid to them by any MAI maintenance client and place any such fees in an interest-bearing escrow
account pending final determination of the action at trial or further order of this Court.
We stayed the preliminary injunction in part by an order of June 9, 1992 which provides:
The preliminary injunction issued by the district court on April 15, 1992 is stayed to the following extent:
Section (A)(1), enjoining defendants from "infringing MAI's copyrights in any manner and from using, publishing,
copying, selling, distributing, or otherwise disposing of any copies or portions of copies" or certain MAI software, is
stayed to the extent that it prohibits defendants from operating MAI computers in order to maintain them.
Section A(2), enjoining defendants from misappropriating MAI trade secrets, is stayed to the extent that it prohibits
defendants from operating MAI computers in order to maintain them.
Section A(3), enjoining defendants from "maintaining any MAI computer system," is stayed in its entirety, including
subsections (a), (b), and (c).
Section (B), ordering defendants to "provide a full accounting of all MAI property" and to retain fees paid to them by
"any MAI maintenance client" in an escrow account, is stayed in its entirety, including subsections (1) and (2).
The remainder of the district court's preliminary injunction shall remain in effect. This order shall remain in effect
pending further order of this court.
In January, 1993, we denied a motion by Peak to stay the district court proceedings. The district court then heard a
motion for partial summary judgment on some of the same issues raised in the preliminary injunction. The district
court granted partial summary judgment for MAI and entered a permanent injunction on the issues of copyright
infringement and misappropriation of trade secrets on February 2, 1993 which provides:
A. Defendants [and certain others] are hereby permanently enjoined as follows:
1. Peak [and certain others] are permanently enjoined from copying, disseminating, selling, publishing, distributing,
loaning, or otherwise infringing MAI's copyrighted works, or any derivatives thereof, including those works for which
registrations have issued, and works for which registrations may issue in the future. The "copying" enjoined herein
specifically includes the acts of loading, or causing to be loaded, directly or indirectly, any MAI software from any
magnetic storage or read only memory device into the electronic random access memory of the central processing
unit of a computer system. As used herein, "computer system" means an MAI central processing unit in combination
with either a video display, printer, disk drives, and/or keyboard.
MAI's copyrighted works, and their derivatives, for which registrations have issued include:
Work Cert. of Reg. No. Date Issued BOSS/IX SOFTWARE VERSION 7.5B[*]20 TX 3 368 502 12/16/91
BOSS/VS LEVEL 7A[*]42 TXU 524 424 (Supp.) 7/01/92 DIAGNOSTICS TXU 507 015 (Basic) 3/09/92
BOSS/VS LEVEL 7.5B TXU 524 423 (Supp.) 7/01/92 DIAGNOSTICS TXU 507 013 (Basic) 3/09/92
Additional MAI copyright registrations are listed on Exh. A hereto.
2. (a) Peak and Francis [and certain others] are permanently enjoined from misappropriating, using in any manner in
their business, including advertising connected therewith, and/or disclosing to others MAI's trade secrets, as that
term is used in California Civil Code � 3426.1(d). MAI's trade secrets, for purposes of this injunction, shall include,
but not be limited to the following: MAI's software, MAI's Field Information Bulletins ("FIB") and all information in
such FIB's, and MAI Customer Database and all information in such Database.
(b) In particular, the persons identified in subparagraph (a) herein are permanently enjoined from soliciting any MAI
computer maintenance customer and from maintaining any contract with any former MAI computer maintenance
customer where knowledge of any such customers was obtained by Francis during his employment with MAI.
We then stayed the permanent injunction in part by an order on February 4, 1993 which provides:
Appellants' emergency motion for stay of the district court's permanent injunction is granted in part. The injunction
entered by the district court on February 2, 1993 is stayed to the following extent:
Section (A)(1), enjoining defendants from "infringing MAI's copyrighted works," is stayed to the extent that it
prohibits defendants from loading MAI software or operating MAI computers in order to maintain them.
Section A(2), enjoining defendants from misappropriating MAI trade secrets, is stayed to the extent that it prohibits
defendants from loading MAI software or operating MAI computers in order to maintain them.
The remainder of the district court's permanent injunction shall remain in effect . . . .
Since the permanent injunction covers some of the same issues appealed in the preliminary injunction, the appeal of
those issues in the context of the preliminary injunction has become moot. See Burbank-Glendale-Pasadena Airport
Authority v. Los Angeles, 979 F.2d 1338, 1340 n. 1 (9th Cir. 1992). Therefore, we grant MAI's motion to dismiss the
appeal of the preliminary injunction relative to the issues of copyright infringement and trade secret
misappropriation. Since other issues covered in the preliminary injunction are not covered in the permanent
injunction,[n1] the appeals have been consolidated and both the permanent injunction and parts of the preliminary
injunction are reviewed here.
III. JURISDICTION AND STANDARD OF REVIEW
We have jurisdiction over interlocutory orders granting injunctions under 28 U.S.C. 1292(a)(1).
In addition, an appeal under 28 U.S.C. 1292(a)(1) brings before the court the entire order, and, in the interests of
judicial economy the court may decide the merits of the case. The court, however, generally will chose to decide
only those matters `inextricably bound up with' the injunctive relief.
Bernard v. Air Line Pilots Ass'n, Int'l, AFL-CIO, 873 F.2d 213, 215 (9th Cir. 1989) (citations omitted).
In this case, the district court's grant of the permanent injunction is "inextricably bound up" with the underlying
decisions of that court on the merits of the copyright and trade secrets claims. Therefore, our review of the propriety
of the permanent injunction is inextricably tied to the underlying decision, and this court has jurisdiction to review
the entire order. Id.
A grant of summary judgment is reviewed de novo.[n2] We must determine, viewing the evidence in the light most
favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district
court correctly applied the relevant substantive law. Federal Deposit Ins. Corp. v. O'Melveny & Meyers, 969 F.2d
744, 747 (9th Cir. 1992). The court must not weigh the evidence or determine the truth of the matter but only
determine whether there is a genuine issue for trial. Id.
A district court's grant of preliminary injunctive relief is subject to limited review. This court will reverse a preliminary
injunction only where the district court "abused its discretion or based its decision on an erroneous legal standard or
on clearly erroneous findings of fact." However, "questions of law underlying the issuance of a preliminary
injunction" are reviewed de novo. Glick v. McKay, 937 F.2d 434, 436 (9th Cir. 1991).
"To obtain a preliminary injunction, a party must show either (1) a likelihood of success on the merits and the
possibility of irreparable injury, or (2) the existence of serious questions going to the merits and the balance of
hardships tipping in [the movant's] favor. These two formulations represent two points on a sliding scale in which
the required degree of irreparable harm increases as the probability of success decreases." Diamontiney v. Borg, 918
F.2d 793, 795 (9th Cir. 1990) (internal quotations and citations omitted).
In other words, "[w]here a party can show a strong chance of success on the merits, he need only show a possibility
of irreparable harm. Where, on the other hand, a party can show only that serious questions are raised, he must
show that the balance of hardships tips sharply in his favor." Bernard v. Air Line Pilots Ass'n, Int'l, AFL-CIO, 873 F.2d
213, 215 (9th Cir. 1989).
IV. COPYRIGHT INFRINGEMENT
The district court granted summary judgment in favor of MAI on its claims of copyright infringement and issued a
permanent injunction against Peak on these claims. The alleged copyright violations include: (1) Peak's running of
MAI software licensed to Peak customers; (2) Peak's use of unlicensed software at its headquarters; and, (3) Peak's
loaning of MAI computers and software to its customers. Each of these alleged violations must be considered
separately.
A. Peak's running of MAI software licensed to Peak customers -
To prevail on a claim of copyright infringement, a plaintiff must prove ownership of a copyright and a "`copying' of
protectable expression" beyond the scope of a license. S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1085 (9th Cir.
1989).
MAI software licenses allow MAI customers to use the software for their own internal information processing.[n3]
This allowed use necessarily includes the loading of the software into the computer's random access memory
("RAM") by a MAI customer. However, MAI software licenses do not allow for the use or copying of MAI software by
third parties such as Peak. Therefore, any "copying" done by Peak is "beyond the scope" of the license.
It is not disputed that MAI owns the copyright to the software at issue here, however, Peak vigorously disputes the
district court's conclusion that a "copying" occurred under the Copyright Act.
The Copyright Act defines "copies" as: material objects, other than phonorecords, in which a work is fixed by any
method now known or later developed, and from which the work can be perceived, reproduced, or otherwise
communicated, either directly or with the aid of a machine or device.
The Copyright Act then explains:
A work is "fixed" in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under
the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise
communicated for a period of more than transitory duration.
The district court's grant of summary judgment on MAI's claims of copyright infringement reflects its conclusion that
a "copying" for purposes of copyright law occurs when a computer program is transferred from a permanent storage
device to a computer's RAM. This conclusion is consistent with its finding, in granting the preliminary injunction,
that: "the loading of copyrighted computer software from a storage medium (hard disk, floppy disk, or read only
memory) into the memory of a central processing unit ("CPU") causes a copy to be made. In the absence of
ownership of the copyright or express permission by license, such acts constitute copyright infringement." We find
that this conclusion is supported by the record and by the law.
Peak concedes that in maintaining its customer's computers, it uses MAI operating software "to the extent that the
repair and maintenance process necessarily involves turning on the computer to make sure it is functional and
thereby running the operating system." It is also uncontroverted that when the computer is turned on the operating
system is loaded into the computer's RAM. As part of diagnosing a computer problem at the customer site, the Peak
technician runs the computer's operating system software, allowing the technician to view the systems error log,
which is part of the operating system, thereby enabling the technician to diagnose the problem.
Peak argues that this loading of copyrighted software does not constitute a copyright violation because the "copy"
created in RAM is not "fixed." However, by showing that Peak loads the software into the RAM and is then able to
view the system error log and diagnose the problem with the computer. MAI has adequately shown that the
representation created in the RAM is "sufficiently permanent or stable to permit it to be perceived, reproduced, or
otherwise communicated for a period of more than transitory duration."
After reviewing the record, we find no specific facts (and Peak points to none) which indicate that the copy created
in the RAM is not fixed. While Peak argues this issue in its pleadings, mere argument does not establish a genuine
issue of material fact to defeat summary judgment. A party opposing a properly supported motion for summary
judgment may not rest upon the mere allegations or denials in pleadings, but "must set forth specific facts showing
that there is a genuine issue for trial." Fed.R.Civ.Proc. 56(e); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,
106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Harper v. Wallingford, 877 F.2d 728 (9th Cir. 1989).
The law also supports the conclusion that Peak's loading of copyrighted software into RAM creates a "copy" of that
software in violation of the Copyright Act. In Apple Computer, Inc. v. Formula Int'l, Inc., 594 F. Supp. 617, 621
(C.D.Cal. 1984), the district court held that the copying of copyrighted software onto silicon chips and subsequent
sale of those chips is not protected by 117 of the Copyright Act. Section 117 allows "the `owner'[n5] of a copy of a
computer program to make or authorize the making of another copy" without infringing copyright law, if it "is an
essential step in the utilization of the computer program" or if the new copy is "for archival purposes only." 17 U.S.C.
117 (Supp. 1988).[n6] One of the grounds for finding that 117 did not apply was the court's conclusion that the
permanent copying of the software onto the silicon chips was not an "essential step" in the utilization of the software
because the software could be used through RAM without making a permanent copy. The court stated:
RAM can be simply defined as a computer component in which data and computer programs can be temporarily
recorded. Thus, the purchaser of [software] desiring to utilize all of the programs on the diskette could arrange to
copy [the software] into RAM. This would only be a temporary fixation. It is a property of RAM that when the
computer is turned off, the copy of the program recorded in RAM is lost.
Apple Computer at 622.
While we recognize that this language is not dispositive, it supports the view that the copy made in RAM is "fixed"
and qualifies as a copy under the Copyright Act.
We have found no case which specifically holds that the copying of software into RAM creates a "copy" under the
Copyright Act. However, it is generally accepted that the loading of software into a computer constitutes the creation
of a copy under the Copyright Act. See e.g. Vault Corp. v. Quaid Software Ltd., 847 F.2d 255, 260 (5th Cir. 1988)
("the act of loading a program from a medium of storage into a computer's memory creates a copy of the
program"); 2 Nimmer on Copyright, 8.08 at 8-105 (1983) ("Inputting a computer program entails the preparation of
a copy."); Final Report of the National Commission on the New Technological Uses of Copyrighted Works, at 13
(1978) ("the placement of a work into a computer is the preparation of a copy"). We recognize that these authorities
are somewhat troubling since they do not specify that a copy is created regardless of whether the software is loaded
into the RAM, the hard disk or the read only memory ("ROM"). However, since we find that the copy created in the
RAM can be "perceived, reproduced, or otherwise communicated," we hold that the loading of software into the RAM
creates a copy under the Copyright Act. 17 U.S.C. 101. We affirm the district court's grant of summary judgment as
well as the permanent injunction as it relates to this issue.
B. Use of unlicensed software at headquarters
It is not disputed that Peak has several MAI computers with MAI operating software "up and running" at its
headquarters. It is also not disputed that Peak only has a license to use MAI software to operate one system. As
discussed above, we find that the loading of MAI's operating software into RAM, which occurs when an MAI system
is turned on, constitutes a copyright violation. We affirm the district court's grant of summary judgment in favor of
MAI on its claim that Peak violated its copyright through the unlicensed use of MAI software at Peak headquarters,
and also affirm the permanent injunction as it relates to this issue.
C. Loaning of MAI computers and software
MAI contends that Peak violated the Copyright Act by loaning MAI computers and software to its customers. Among
the exclusive rights given to the owner of a copyrighted work is the right to distribute copies of the work by lending.
17 U.S.C. 106(3). Therefore, Peak's loaning of MAI software, if established, would constitute a violation of the
Copyright Act.
MAI argues that it is clear that Peak loaned out MAI computers because Peak advertisements describe the
availability of loaner computers for its customers and Chiechi admitted that the available loaners included MAI
computers. However, there was no evidence that a MAI computer was ever actually loaned to a Peak customer. Paul
Boulanger, a Senior Field Engineer at Peak, testified in his deposition that he was not aware of any MAI systems
being loaned to Peak customers or of any customer asking for one. Charles Weiner, a Field Service Manager at Peak,
testified in his deposition that he did not have any knowledge of MAI systems being loaned to customers. Weighing
this evidence in the light most favorable to Peak, whether Peak actually loaned out any MAI system remains a
genuine issue of material fact.
As a general rule, a permanent injunction will be granted when liability has been established and there is a threat of
continuing violations. See, National Football League v. McBee & Bruno's, Inc., 792 F.2d 726, 732 (8th Cir. 1986); 3
Nimmer on Copyright 14.06[B] at 14-88. However 502(a) of the Copyright Act authorizes the court to "grant
temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a
copyright." 17 U.S.C. 502(a) (emphasis added). While there has been no showing that Peak has actually loaned out
any MAI software, the threat of a violation is clear as Peak has MAI computers in its loaner inventory. The
permanent injunction is upheld as it relates to this issue.
V. MISAPPROPRIATION OF TRADE SECRETS
The district court granted summary judgment in favor of MAI on its misappropriation of trade secrets claims and
issued a permanent injunction against Peak on these claims. The permanent injunction prohibits Peak from
"misappropriating, using in any manner in their business, including advertising connected therewith, and/or
disclosing to others MAI's trade secrets," including: (1) MAI Customer Database; (2) MAI Field Information Bulletins
("FIB"); and, (3) MAI software.
Peak argues that since MAI's motion for summary judgment only included argument regarding the customer
database as a trade secret that the grant of summary judgment on the FIBs and software was overbroad. However,
in Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), the Supreme Court held that "so
long as the losing party was on notice that she had to come forward with all of her evidence," summary judgment
can properly be entered. Id. at 326, 106 S.Ct. at 2554. Although Celotex dealt with the court's authority to grant
summary judgment sua sponte, its notice analysis is applicable to any summary judgment motion.
MAI argues that Peak had adequate notice because, while MAI only presented argument regarding the customer
database, it moved for summary judgment on its claims of misappropriation of trade secrets generally, and, because
MAI's Statement of Uncontroverted Facts included statements that the FIBs and software were trade secrets. We
agree. However, we do not agree with MAI's contention that Peak has waived its right to appeal summary judgment
on these issues by failing address the merits in the district court. Therefore, we reach the merits of the grant of
summary judgment on each trade secret claim.
A. Customer Database
California has adopted the Uniform Trade Secrets Act ("UTSA") which codifies the basic principles of common law
trade secret protection. Cal.Civ. Code 3426-3426.10 (West Supp. 1993). To establish a violation under the UTSA, it
must be shown that a defendant has been unjustly enriched by the improper appropriation, use or disclosure of a
"trade secret."
Peak argues both that the MAI Customer Database is not a "trade secret," and that even if it is a trade secret, that
Peak did not "misappropriate" it.
The UTSA defines a "trade secret" as:
information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(1) Derives independent economic value, actual or potential, from not being generally
known to the public or to other persons who can obtain economic value from its
disclosure or use; and
(2) Is the subject of efforts that are reasonable under the circumstances to maintain its
secrecy.
MAI contends its Customer Database is a valuable collection of data assembled over many years that allows MAI to
tailor its service contracts and pricing to the unique needs of its customers and constitutes a trade secret.
We agree that the Customer Database qualifies as a trade secret. The Customer Database has potential economic
value because it allows a competitor like Peak to direct its sales efforts to those potential customers that are already
using the MAI computer system. Further, MAI took reasonable steps to insure the secrecy to this information as
required by the UTSA. MAI required its employees to sign confidentiality agreements respecting its trade secrets,
including the Customer Database. Thus, under the UTSA, the MAI Customer Database constitutes a trade secret.
We also agree with MAI that the record before the district court on summary judgment establishes that Peak
misappropriated the Customer Database.
"Misappropriation" is defined under the UTSA as:
(1) Acquisition of a trade secret of another by a person who knows or has reason to know that
the trade secret was acquired by improper means; or
(2) Disclosure or use of a trade secret of another without express or implied consent by a person
who:
(A) Used improper means to acquire knowledge of the trade secret; or
(B) At the time of disclosure or use, knew or had reason to know that his or her knowledge of the trade secret was:
(i) Derived from or through a person who had utilized improper means to acquire it; (ii) Acquired
under circumstances giving rise to a duty to maintain its secrecy or limit its use; or (iii) Derived
from or through a person who owed a duty to the person seeking relief to maintain its secrecy
or limit its use; or
(C) Before a material change of his or her position knew or had reason to know that it was a trade secret and that
knowledge of it had been acquired by accident or by mistake.
Peak contends that Francis never physically took any portion of MAI's customer database and that neither Francis
nor anyone under his direction put information he had obtained from working at MAI in the Peak database.
However, to find misappropriation under the UTSA, this need not be established.
The UTSA definition of "misappropriation" has been clarified by case law which establishes that the right to
announce a new affiliation, even to trade secret clients of a former employer, is basic to an individual's right to
engage in fair competition, and that the common law right to compete fairly and the right to announce a new
business affiliation have survived the enactment of the UTSA. American Credit Indem. Co. v. Sacks, 213 Cal.App.3d
622, 262 Cal.Rptr. 92, 99-100 (Cal. Ct.App. 1989). However, misappropriation occurs if information from a customer
database is used to solicit customers. Id.
Merely informing a former employer's customers of a change of employment, without more, is not solicitation. Id.
262 Cal.Rptr. at 99 (citing Aetna Bldg. Maintenance Co. v. West, 39 Cal.2d 198, 246 P.2d 11 (1952)). However, in
this case, Francis did more than merely announce his new affiliation with Peak. When Francis began working for
Peak, he called MAI customers whose names he recognized. Additionally, Francis personally went to visit some of
these MAI customers with proposals to try and get them to switch over to Peak. These actions constituted
solicitation and misappropriation under the UTSA definition. We affirm the district court's grant of summary
judgment in favor of MAI on its claim that Peak misappropriated its Customer Database and affirm the permanent
injunction as it relates to this issue.
B. Field Information Bulletins
MAI argues summary judgment was properly granted on its claim of misappropriation of the FIBs because the FIBs
are a valuable trade secret of MAI and the evidence showed that the FIBs were being used by Peak to operate a
business competing unfairly with MAI.
We agree that the FIBs constitute trade secrets. It is uncontroverted that they contain technical data developed by
MAI to aid in the repair and servicing of MAI computers, and that MAI has taken reasonable steps to insure that the
FIBs are not generally known to the public.
However, whether Peak has misappropriated the FIBs remains a genuine issue of material fact. The only evidence
introduced by MAI to establish Peak's use of the FIBs is Peak's advertisements claiming that "Peak's system
specialists are specifically trained on the latest hardware releases on MAI Basic Four." MAI asserts that if Peak did
not use FIBs that this claim would have to be false. However, Weiner and Boulanger testified in their depositions
that they had never seen a FIB at Peak. Similarly, Boulanger, Robert Pratt and Michael McIntosh[n8] each testified
that they did not have any FIB information when they left MAI. Weighing this evidence in the light most favorable to
Peak, whether Peak used any of the FIBs remains a genuine issue of material fact, and the district court's grant of
summary judgment on this claim of trade secret misappropriation is reversed and the permanent injunction is
vacated as it relates to this issue.
C. Software
MAI contends the district court properly granted summary judgment on its claim of misappropriation of software
because its software constitutes valuable unpublished works that allow its machines to be maintained. MAI argues
that Peak misappropriated the software by loading it into the RAM.
We recognize that computer software can qualify for trade secret protection under the UTSA. See e.g., S.O.S., Inc.
v. Payday, Inc., 886 F.2d 1081, 1089-90 (9th Cir. 1989). However, a plaintiff who seeks relief for misappropriation of
trade secrets must identify the trade secrets and carry the burden of showing that they exist. Diodes, Inc. v.
Franzen, 260 Cal.App.2d 244, 67 Cal.Rptr. 19, 22-24 (1968); see also Universal Analytics Inc. v. MacNeal-
Schwendler Corp., 707 F. Supp. 1170, 1177 (C.D.Cal. 1989) (plaintiff failed to inform defendant or the court
"precisely which trade secret it alleges was misappropriated"), aff'd, 914 F.2d 1256 (9th Cir. 1990).
Here, while MAI asserts that it has trade secrets in its diagnostic software and operating system, and that its
licensing agreements constitute reasonable efforts to maintain their secrecy, MAI does not specifically identify these
trade secrets. In his Declaration, Joseph Perez, a Customer Service Manager at MAI, stated that the diagnostic
software "contain valuable trade secrets of MAI," however, the Declaration does not specify what these trade secrets
are. Additionally, we find no declaration or deposition testimony which specifically identifies any trade secrets. Since
the trade secrets are not specifically identified, we cannot determine whether Peak has misappropriated any trade
secrets by running the MAI operating software and/or diagnostic software in maintaining MAI systems for its
customers, and we reverse the district court's grant of summary judgment in favor of MAI on its claim that Peak
misappropriated trade secrets in its computer software and vacate the permanent injunction as it relates to this
issue.
VI. BREACH OF CONTRACT
The district court granted summary judgment in favor of MAI on its breach of contract claim against Eric Francis. It
is clear from the depositions of Francis and Chiechi that Francis solicited customers and employees of MAI in breach
of his employment contract with MAI, and we affirm the district court's grant of summary judgment on this issue and
affirm the permanent injunction as it relates to this claim.
VII. PRELIMINARY INJUNCTION
A. Trademark Infringement
In granting the preliminary injunction, the district court found that Peak advertisements that "MAI Basic Four"
computers are part of "Peak's Product Line" imply that Peak is a MAI dealer for new computers and constitute
trademark infringement. The district court also found that: "Such acts are likely to cause confusion, mistake or
deception in that potential purchasers of MAI computers and/or maintenance services will be led to believe that
Peak's activities are associated with or sanctioned or approved by MAI."
Peak claims that the district court erred in granting the preliminary injunction because it did not apply the legal tests
established by the Ninth Circuit to evaluate whether a likelihood of confusion existed. See e.g., J.B. Williams Co. v.
Le Conte Cosmetics, Inc., 523 F.2d 187, 191 (9th Cir. 1975) (five factor test to determine likelihood of confusion)
cert. denied, 424 U.S. 913, 96 S.Ct. 1110, 47 L.Ed.2d 317 (1976), AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-
49 (9th Cir. 1979) (eight factor test). However, the district court was not required to consider all these factors. As
we recognized in Apple Computer, Inc. v. Formula Int'l, Inc., 725 F.2d 521 (9th Cir. 1984):
[I]n granting a preliminary injunction, the parties will not have had a full opportunity to either develop or present
their cases and the district court will have had only a brief opportunity to consider the different factors relative to the
likelihood of confusion determination. . . . The appropriate time for giving full consideration to [these factors] is
when the merits of the case are tried.
Peak has not shown how the district court clearly erred in its preliminary trademark conclusions. Accordingly, the
district court did not abuse its discretion and this portion of the preliminary injunctions is upheld.
B. False Advertising
In granting the preliminary injunction, the district court found that "Peak's advertising . . . falsely misleads the public
as to Peak's capability of servicing and maintaining MAI computer systems." The injunction prohibits Peak from
"advertising, directly or indirectly, that MAI Basic Four is part of Peak's Product line, that Peak has `satellite
facilities,' and/or that Peak's technicians are `specifically trained on the latest hardware releases of MAI.'"
Peak argues that these representations in its ads are not false. However, the district court's findings are supported
by the record. Depositions show that Peak is not an authorized MAI dealer, that its technicians receive no ongoing
training and that its "satellite facilities" are actually storage sheds. Perhaps the storage sheds could be legitimately
characterized as satellite facilities, but the district court's conclusion otherwise was not clearly erroneous.
Accordingly, the district court did not abuse its discretion and this portion of the preliminary injunction is upheld.
VIII. CONCLUSION
The following sections of the preliminary injunction issued by the district court on April 15, 1992 have been mooted
by that court's issuing of a permanent injunction:
Section (A)(1), enjoining defendants from infringing MAI's copyrights; Section (A)(2) enjoining defendants from
misappropriating MAI trade secrets; Section (A)(3) enjoining defendants from maintaining MAI computers; Section
(A)(4) enjoining defendants from soliciting customers; and, Section (A)(5) enjoining defendants from maintaining
certain customer contracts.
The remainder of the district court's preliminary injunction shall remain in effect pending the district court's final
judgment. Earlier orders of this court temporarily staying portions of the injunction are vacated.
The permanent injunction issued by the district court on February 2, 1993, is vacated to the following extent:
Section (A)(2)(a), enjoining defendants from "misappropriating . . . MAI's trade secrets" is vacated as it relates to
MAI's software and MAI's Field Information Bulletins.
The remainder of the permanent injunction shall remain in effect. Earlier orders of this court temporarily staying
portions of the injunction are vacated.
The district court's grant of summary judgment is AFFIRMED in part and REVERSED in part. This case is REMANDED
for proceedings consistent with this opinion.
——o0o——
Sega Enterprises Ltd. v. Accolade Inc.
U.S. Court of Appeals, Ninth Circuit
October 20, 1992
977 F.2d 1510, 24 USPQ2d 1561
Reinhardt, J.
This case presents several difficult questions of first impression involving our copyright and trademark laws.1 We are
asked<977 F.2d 1514> to determine, first, whether the Copyright Act permits persons who are neither copyright
holders nor licensees to disassemble a copyrighted computer program in order to gain an understanding of the
unprotected functional elements of the program. In light of the public policies underlying the Act, we conclude that,
when the person seeking the understanding has legitimate reason for doing so and when no other means of access
to the unprotected elements exists, such disassembly is as a matter of law a fair use of the copyrighted work.
Second, we must decide the legal consequences under the Lanham Trademark Act of a computer manufacturer’s use
of a security system that affords access to its computers to software cartridges that include an initialization code
which triggers a screen display of the computer manufacturer’s trademark. The computer manufacturer also
manufactures software cartridges; those cartridges all contain the initialization code. The question is whether the
computer manufacturer may enjoin competing cartridge manufacturers from gaining access to its computers through
the use of the code on the ground that such use will result in the display of a “false” trademark. Again, our holding is
based on the public policies underlying the statute. We hold that when there is no other method of access to the
computer that is known or readily available to rival cartridge manufacturers, the use of the initialization code by a
rival does not violate the Act even though that use triggers a misleading trademark display. Accordingly, we reverse
the district court’s grant of a <24 USPQ2d 1563> preliminary injunction in favor of plaintiff-appellee Sega
Enterprises, Ltd. on its claims of copyright and trademark infringement. We decline, however, to order that an
injunction pendente lite issue precluding Sega from continuing to use its security system, even though such use may
result in a certain amount of false labeling. We prefer to leave the decision on that question to the district court
initially.
I. Background
Plaintiff-appellee Sega Enterprises, Ltd. (“Sega”), a Japanese corporation, and its subsidiary, Sega of America,
develop and market video entertainment systems, including the “Genesis” console (distributed in Asia under the
name “Mega-Drive”) and video game cartridges. Defendant-appellant Accolade, Inc., is an independent developer,
manufacturer, and marketer of computer entertainment software, including game cartridges that are compatible
with the Genesis console, as well as game cartridges that are compatible with other computer systems.
Sega licenses its copyrighted computer code and its “SEGA” trademark to a number of independent developers of
computer game software. Those licensees develop and sell Genesis-compatible video games in competition with
Sega. Accolade is not and never has been a licensee of Sega. Prior to rendering it own games compatible with the
Genesis console, Accolade explored the possibility of entering into a licensing agreement with Sega, but abandoned
the effort because the agreement would have required that Sega be the exclusive manufacturer of all games
produced by Accolade.
Accolade used a two-step process to render its video games compatible with the Genesis console. First, it “reverse
engineered” Sega’s video game programs in order to discover the requirements for compatibility with the Genesis
console. As part of the reverse engineering process, Accolade transformed the machine-readable object code
contained in commercially available copies of Sega’s game cartridges into human-readable source code using a
process called “disassembly” or “decompilation”.2 Accolade purchased a Genesis <977 F.2d 1515> console and
three Sega game cartridges, wired a decompiler into the console circuitry, and generated printouts of the resulting
source code. Accolade engineers studied and annotated the printouts in order to identify areas of commonality
among the three game programs. They then loaded the disassembled code back into a computer, and experimented
to discover the interface specifications for the Genesis console by modifying the programs and studying the results.
At the end of the reverse engineering process, Accolade created a development manual that incorporated the
information it had discovered about the requirements for a Genesis-compatible game. According to the Accolade
employees who created the manual, the manual contained only functional descriptions of the interface requirements
and did not include any of Sega’s code.
In the second stage, Accolade created its own games for the Genesis. According to Accolade, at this stage it did not
copy Sega’s programs, but relied only on the information concerning interface specifications for the Genesis that was
contained in its development manual. Accolade maintains that with the exception of the interface specifications,
none of the code in its own games is derived in any way from its examination of Sega’s code. In 1990, Accolade
released “Ishido”, a game which it had originally developed and released for use with the Macintosh and IBM
personal computer systems, for use with the Genesis console.
Even before Accolade began to reverse engineer Sega’s games, Sega had grown concerned about the rise of
software and hardware piracy in Taiwan and other Southeast Asian countries to which it exported its products.
Taiwan is not a signatory to the Berne Convention and does not recognize foreign copyrights. Taiwan does allow
prosecution of trademark counterfeiters. However, the counterfeiters had discovered how to modify Sega’s game
programs to blank out the screen display of Sega’s trademark before repackaging and reselling the games as their
own. Accordingly, Sega began to explore methods of protecting its trademark rights in <24 USPQ2d 1564> the
Genesis and Genesis-compatible games. While the development of its own trademark security system (TMSS) was
pending, Sega licensed a patented TMSS for use with the Genesis home entertainment system.
The most recent version of the Genesis console, the “Genesis III”, incorporates the licensed TMSS. When a game
cartridge is inserted, the microprocessor contained in the Genesis III searches the game program for four bytes of
data consisting of the letters “S-E-G-A”(the “TMSS initialization code”). If the Genesis III finds the TMSS initialization
code in the right location, the game is rendered compatible and will operate on the console. In such case, the TMSS
initialization code then prompts a visual display for approximately three seconds which reads “PRODUCED BY OR
UNDER LICENSE FROM SEGA ENTERPRISES LTD” (the “Sega Message”). All of Sega’s game cartridges, including
those disassembled by Accolade, contain the TMSS initialization code.
Accolade learned of the impending release of the Genesis III in the United States in January 1991, when the Genesis
III was displayed at a consumer electronics show. When a demonstration at the consumer electronics show revealed
that Accolade’s “Ishido” game cartridges would not operate on the Genesis III, Accolade returned to the drawing
board. During the reverse engineering process, Accolade engineers had discovered a small segment of code – the
TMSS initialization code – that was included in the “power-up” sequence of every Sega game, but that had no
identifiable function. The games would operate on the original Genesis console even if the code segment was
removed. Mike Lorenzen, <977 F.2d 1516> the Accolade engineer with primary responsibility for reverse
engineering the interface procedures for the Genesis console, sent a memo regarding the code segment to Alan
Miller, his supervisor and the current president of Accolade, in which he noted that “it is possible that some future
Sega peripheral device might require it for proper initialization.”
In the second round of reverse engineering, Accolade engineers focused on the code segment identified by
Lorenzen. After further study, Accolade added the code to its development manual in the form of a standard header
file to be used in all games. The file contains approximately twenty to twenty-five bytes of data. Each of Accolade’s
games contains a total of 500,000 to 1,500,000 bytes. According to Accolade employees, the header file is the only
portion of Sega’s Code that Accolade copied into its own game programs.
In 1991, Accolade released five more games for use with the Genesis III, “Star Control”, “Hardball!”, “Onslaught”,
“Turrican”, and “Mike Ditka Power Football.” With the exception of “Mike Ditka Power Football”, all of those games,
like “Ishido”, had originally been developed and marketed for use with other hardware systems. All contained the
standard header file that included the TMSS initialization code. According to Accolade, it did not learn until after the
Genesis III was released on the market in September 1991, that in addition to enabling its software to operate on
the Genesis III, the header file caused the display of the Sega Message. All of the games except “Onslaught”
operate on the Genesis III console; apparently, the programmer who translated “Onslaught” for use with the
Genesis system did not place the TMSS initialization code at the correct location in the program.
All of Accolade’s Genesis-compatible games are packaged in a similar fashion. The front of the box displays
Accolade’s “Ballistic” trademark and states “for use with Sega Genesis and Mega Drive Systems.” The back of the
box contains the following statement: “Sega and Genesis are registered trademarks of Sega Enterprises, Ltd. Game
1991 Accolade, Inc. All rights reserved, Ballistic is a trademark of Accolade, Inc. Accolade, Inc. is not associated with
Sega Enterprises, Ltd. All product and corporate names are trademarks and registered trademarks of their respective
owners.”
Sega filed suit against Accolade on October 31, 1991, alleging trademark infringement and false designation of origin
in violation of sections 32(1) and 43(a) of the Lanham Act, 15 U.S.C. Sections 1114 (a)(1), 1125(a) .3 On November
29, 1991, Sega amended its complaint to include a claim for copyright infringement. Accolade filed a counterclaim
against Sega for false designation of origin under section 43(a) of the Lanham Act, 15 U.S.C. Section 1125(a) 4 .
The <24 USPQ2d 1565> parties filed cross-motions for preliminary injunctions on their respective claims.
After expedited discovery and a hearing, the district court granted Sega’s motion. Prior to the hearing, Sega
introduced the declaration of Takeshi Nagashima, an employee of Sega. Nagashima stated that it was possible either
to create a game program which did not contain the TMSS code but would still operate on the Genesis III, or to
modify a game program so that the Sega Message would not appear when the game cartridge was inserted.
Nagashima stated that he had been able to make both modifications using standard components, at a total extra
cost of approximately fifty cents. At the hearing, counsel for Sega produced two game cartridges which, he
represented, contained the modifications made by Nagashima, and demonstrated to the district judge that the Sega
Message <977 F.2d 1517> did not appear when the cartridges were inserted into a Genesis III console. Sega
offered to make the cartridges available for inspection by Accolade’s counsel, but declined to let Accolade’s software
engineers examine the cartridges or to reveal the manner in which the cartridges had been modified. The district
court concluded that the TMSS code was not functional and that Accolade could not assert a functionality defense to
Sega’s claim of trademark infringement.
With respect to Sega’s copyright claim, the district court rejected Accolade’s contention that intermediate copying of
computer object code does not constitute infringement under the Copyright Act. It found that Accolade had
disassembled Sega’s code for a commercial purpose, and that Sega had likely lost sales of its games as a result of
Accolade’s copyright. The court further found that there were alternatives to disassembly that Accolade could have
used in order to study the functional requirements for Genesis compatibility. Accordingly, it also rejected Accolade’s
fair use defense to Sega’s copyright infringement claim.
Based on its conclusion that Sega is likely to succeed on the merits of its claims for copyright and trademark
infringement, on April 3, 1992, the district court enjoined Accolade from: (1) disassembling Sega’s copyrighted code;
(2) using or modifying Sega’s copyrighted code; (3) developing, manufacturing, distributing, or selling Genesis-
compatible games that were created in whole or in part by means that included disassembly; and (4) manufacturing,
distributing, or selling any Genesis-compatible game that prompts the Sega Message. On April 9, 1992, in response
to a request from Sega, the district court modified the preliminary injunction order to require the recall of Accolade’s
infringing games within ten business days.
On April 14, 1992,Accolade filed a motion in the district court for a stay of the preliminary injunction pending appeal.
When the district court failed to rule on the motion for a stay by April 21, ten business days after the April 9 recall
order, Accolade filed a motion for an emergency stay in this court pursuant to 9th Cir. R. 27-3, together with its
notice of appeal. On April 23, we stayed the April 9 recall order. The April 3 preliminary injunction order remained in
effect until August 28, when we ordered it dissolved and announced that this opinion would follow.

II. Standard of Review
In order to obtain a preliminary injunction, the movant must demonstrate “either a likelihood of success on the
merits and the possibility of irreparable injury, or that serious questions going to the merits were raised and the
balance of hardships tips sharply in its favor.” Johnson Controls, Inc. v. Phoenix Control Systems, Inc., 886 F.2d
1173, 1174 [12 USPQ2d 1566] (9th Cir. 1989). We may reverse the district court’s grant of a preliminary injunction
to Sega if the district court abused its discretion, made an error of law, or based its decision on an erroneous legal
standard or on clearly erroneous findings of fact. Religious Technology Ctr. v. Scott, 869 F.2d 1306, 1309 [10
USPQ2d 1379] (9th Cir. 1989); Lou v. Belzberg, 834 F.2d 730, 733 (9th Cir. 1987), cert. denied, 485 U.S. 993
(1988).
III. Copyright Issues
Accolade raises four arguments in support of its position that disassembly of the object code in a copyrighted
computer program does not constitute copyright infringement. First, it maintains that intermediate copying does not
infringe the exclusive rights granted to copyright owners in section 106 of the Copyright Act unless the end product
of the copying is substantially similar to the copyrighted work. Second, it argues <977 F.2d 1518> that disassembly
of object code in order to gain an understanding of the ideas and functional concepts embodied in the code is lawful
under section 102(b) of the Act, which exempts ideas and functional concepts from copyright protection. Third, it
suggests that disassembly <24 USPQ2d 1566> is authorized by section 117 of the Act, which entitles the lawful
owner of a copy of a computer program to load the program into a computer. Finally, Accolade contends that
disassembly of object code in order to gain an understanding of the ideas and functional concepts embodied in the
code is a fair use that is privileged by section 107 of the Act.
Neither the language of the Act nor the law of this circuit supports Accolade’s first three arguments. Accolade’s
fourth argument, however, has merit. Although the question is fairly debatable, we conclude based on the policies
underlying the Copyright Act that disassembly of copyrighted object code is, as a matter of law, a fair use of the
copyrighted work if such disassembly provides the only means of access to those elements of the code that are not
protected by copyright and the copier has a legitimate reason for seeking such access. Accordingly, we hold that
Sega has failed to demonstrate a likelihood of success on the merits of its copyright claim. Because on the record
before us the hardships do not tip sharply (or at all) in Sega’s favor, the preliminary injunction issued in its favor
must be dissolved, at least with respect to that claim.
A. Intermediate Copying
We have previously held that the Copyright Act does not distinguish between unauthorized copies of a copyrighted
work on the basis of what stage of the alleged infringer’s work the unauthorized copies represent. Walker v.
University Books, 602 F.2d 859, 864 [202 USPQ 793] (9th Cir. 1979) (“[T]he fact that an allegedly infringing copy of
a protected work may itself be only an inchoate representation of some final product to be marketed commercially
does not in itself negate the possibility of infringement.”). Our holding in Walkerwas based on the plain language of
the Act. Section 106 grants to the copyright owner the exclusive rights “to reproduce the work in copies”, “to
prepare derivative works based upon the copyrighted work”, and to authorize the preparation of copies and
derivative works. 17 U.S.C. Section 106(1)-(2) . Section 501 provides that “[a]nyone who violates any of the
exclusive rights of the copyright owner as provided by sections 106 through 118... is an infringer of the copyright.”
Id. Section 501(a) . On its face, that language unambiguously encompasses and proscribes “intermediate copying”.
Walker, 602 F.2d at 864-64 ;see also Walt Disney Productions v. Filmation Associates, 628 F. Supp. 871, 875-76
[230 USPQ 524] (C.D. Cal. 1986).
In order to constitute a “copy” for purposes of the Act, the allegedly infringing work must be fixed in some tangible
form, “from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the
aid of a machine or device.” 17 U.S.C. Section 101. The computer file generated by the disassembly program, the
printouts of the disassembled code, and the computer files containing Accolade’s modifications of the code that were
generated during the reverse engineering process all satisfy that requirement. The intermediate copying done by
Accolade therefore falls squarely within the category of acts that are prohibited by the statute.
Accolade points to a number of cases that it argues establish the lawfulness of intermediate copying. Most of the
cases involved the alleged copying of books, scripts, or literary characters. See v. Durang, 711 F.2d 141 [219 USPQ
771] (9th Cir. 1983);Warner Bros. v. ABC, 654 F.2d 204 [211 USPQ 97] (2d Cir. 1981); Miller v. Universal City
Studios, Inc., 650 F.2d 1365 [212 USPQ 345] (5th Cir. 1981); Walker v. Time Life Films, Inc., 615 F. Supp. 430 [227
USPQ 698] (S.D.N.Y. 1985), aff’d, 784 F.2d 44 [228 USPQ 505] (2d Cir.), cert. denied, 476 U.S. 1159 (1986); Davis
v. United Artists, Inc., 547 F. Supp. 722 (S.D.N.Y. 1982); Fuld v. NBC, 390 F. Supp. 877 [185 USPQ 460] (S.D.N.Y.
1975); Cain v. Universal Pictures Co., 47 F. Supp. 1013 [56 USPQ 47] (S.D. Cal. 1942). In each case, however, the
eventual lawsuit alleged infringement only as to the final work of the defendants. We conclude that this group of
cases does not alter or limit the holding of Walker.
The remaining cases cited by Accolade, like the case before us, involved intermediate copying of computer code as
an initial step in the development of a competing product. Computer Assoc. Int’l v. Altai, Inc., 23 U.S.P.Q.2d (BNA)
1241 (2d Cir. 1992) (“CAI”); NEC Corp. v. Intel Corp., 10 U.S.P.Q.2d 1177 (N.D. Cal. 1989); E.F. Johnson Co. v.
<977 F.2d 1519> Uniden Corp., 623 F. Supp. 1485 [228 USPQ 891](D. Minn. 1985). In each case, the court based
its determination regarding infringement solely on the degree of similarity between the allegedly infringed work and
the defendant’s final product. A close reading of those cases, however, reveals that in none of them was the legality
of the intermediate copying at issue. Sega cites an equal number of cases involving intermediate copying of
copyrighted computer code to support its assertion that such copying is prohibited. Atari Games Corp. v. Nintendo of
America, Inc., 18 U.S.P.Q.2d 1935 (N.D. Cal. 1991); SAS Institute, Inc. v. S & H <24 USPQ2d 1567> Computer
Systems, Inc., 605 F. Supp. 816 [225 USPQ 916] (M.D. Tenn. 1985); S & H Computer Systems, Inc. v. SAS Institute,
Inc., 568 F. Supp. 416 [222 USPQ 715] (M.D. Tenn. 1983); Hubco Data Products v. Management Assistance, Inc.,
219 U.S.P.Q. 450 (D. Idaho 1983). Again, however, it appears that the question of the lawfulness of intermediate
copying was not raised in any of those cases.
In summary, the question whether intermediate copying of computer object code infringes the exclusive rights
granted to the copyright owner in section 106 of the Copyright Act is a question of first impression. In light of the
unambiguous language of the Act, we decline to depart from the rule set forth in Walker for copyrighted works
generally. Accordingly, we hold that intermediate copying of computer object code may infringe the exclusive rights
granted to the copyright owner in section 106 of the Copyright Act regardless of whether the end product of the
copying also infringes those rights. If intermediate copying is permissible under the Act, authority for such copying
must be found in one of the statutory provisions to which the rights granted in section 106 are subject.
B. The Idea/Expression Distinction
Accolade next contends that disassembly of computer object code does not violate the Copyright Act because it is
necessary in order to gain access to the ideas and functional concepts embodied in the code, which are not
protected by copyright. 17 U.S.C. Section 102(b). Because humans cannot comprehend object code, it reasons,
disassembly of a commercially available computer program into human-readable form should not be considered an
infringement of the owner’s copyright. Insofar as Accolade suggests that disassembly of object code is lawful per se,
it seeks to overturn settled law.
Accolade’s argument regarding access to ideas is, in essence, an argument that object code is not eligible for the full
range of copyright protection. Although some scholarly authority supports that view, we have previously rejected it
based on the language and legislative history of the Copyright Act. Johnson Controls, Inc. v. Phoenix Control Sys.,
Inc., 886 F.2d 1173, 1175 [12 USPQ2d 1566] (9th Cir. 1989); Apple Computer, Inc. v. Formula Int’l Inc., 725 F.2d
521, 524-25 [221 USPQ 762] (9th Cir. 1984); see also Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d
1240, 1246-48 [219 USPQ 113] (3d Cir. 1983), cert. dismissed, 464 U.S. 1033 (1984).
As recommended by the National Commission on New Technological Uses of Copyrighted Works (CONTU), the 1980
amendments to the Copyright Act unambiguously extended copyright protection to computer programs. Pub. L. 96-
517, sec. 10, 94 Stat. 3028 (1980) (codified at 17 U.S.C. Sections 101, 117); see National Commission on New
Technological Uses of Copyrighted Works, Final Report 1 (1979) [CONTU Report].5 “[T]he Act makes no distinction
between the copyrightability of those programs which directly interact with the computer user and those which
simply manage the computer system.” Formula, 725 F.2d at 525 . Nor does the Act require that a work be directly
accessible to humans in order to be eligible for copyright protection. Rather, it extends protection to all original
works “which... can be perceived, reproduced, or otherwise communicated, <977 F.2d 1520> either directly or with
the aid of a machine or device.” 17 U.S.C. Section 102(a) ; see Formula, 725 F.2d at 525 .The statutory language,
read together with the CONTU report, leads inexorably to the conclusion that the copyright in a computer program
extends to the object code version of the program. Formula, 725 F.2d at 525 ;Franklin, 714 F.2d at 1248 ; CONTU
Report at 21.
Nor does a refusal to recognize a per se right to disassemble object code lead to an absurd result. The ideas and
functional concepts underlying many types of computer programs, including word processing programs,
spreadsheets, and video game displays, are readily discernible without the need for disassembly, because the
operation of such programs is visible on the computer screen. The need to disassemble object code arises, if at all,
only in connection with operations systems, system interface procedures, and other programs that are not visible to
the user when operating – and then only when no alternative means of gaining an understanding of those ideas and
functional concepts exists. In our view, consideration of the unique nature of computer object code thus is more
appropriate as part of the case-by-case, equitable “fair use” analysis authorized by section 107 of the Act. See infra
Part III (D). Accordingly, we reject Accolade’s second argument. <24 USPQ2d 1568>
C. Section 117
Section 117 of the Copyright Act allows the lawful owner of a copy of a computer program to copy or adapt the
program if the new copy or adaptation “is created as an essential step in the utilization of the computer program in
conjunction with a machine and... is used in no other manner.” 17 U.S.C. Section 117(1) .Accolade contends that
section 117 authorizes disassembly of the object code in a copyrighted computer program.
Section 117 was enacted on the recommendation of CONTU, which noted that “[b]ecause the placement of any
copyrighted work into a computer is the preparation of a copy [since the program is loaded into the computer’s
memory], the law should provide that persons in rightful possession of copies of programs be able to use them
freely without fear of exposure to copyright liability.” CONTU Report at 13. We think it is clear that Accolade’s use
went far beyond that contemplated by CONTU and authorized by section 117. Section 117 does not purport to
protect a user who disassembles object code, converts it from assembly into source code, and makes printouts and
photocopies of the refined source code version.6
D. Fair use
Accolade contends, finally, that its disassembly of copyrighted object code as a necessary step in its examination of
the unprotected ideas and functional concepts embodied in the code is a fair use that is privileged by section 107 of
the Act. Because, in the case before us, disassembly is the only means of gaining access to those unprotected
aspects of the program, and because Accolade has a legitimate interest in gaining such access (in order to
determine how to make its cartridges compatible with the Genesis console), we agree with Accolade. Where there is
good reason for studying or examining the unprotected aspects of a copyrighted computer program, disassembly for
purposes of such study or examination constitutes a fair use.
As a preliminary matter, we reject Sega’s contention that the assertion of a fair use defense in connection with the
disassembly of object code is precluded by statute. First, Sega argues that not only does section 117 of the Act not
authorize disassembly of object code, but it also constitutes a legislative determination that any copying of a
computer program otherthan that authorized by section 117 cannot be considered a fair use of that program under
<977 F.2d 1521> section 107. That argument verges on the frivolous. Each of the exclusive rights created by
section 106 of the Copyright Act is expressly made subject to all of the limitations contained in sections 107 through
120. 17 U.S.C. Section 106 . Nothing in the language or the legislative history of section 117, or in the CONTU
Report, suggests that section 117 was intended to preclude the assertion of a fair use defense with respect to uses
of computer programs the are not covered by section 117, nor has section 107 been amended to exclude computer
programs from its ambit.
Moreover, sections 107 and 117 serve entirely different functions. Section 117 defines a narrow category of copying
that is lawful per se, 17 U.S.C. Section 117. Section 107, by contrast, establishes a defenseto an otherwise valid
claim of copyright infringement. It provides that particular instances of copying that otherwise would be actionable
are lawful, and sets forth the factors to be considered in determining whether the defense applies. Id. Section 107.
The fact that Congress has not chosen to provide a per se exemption to section 106 for disassembly does not mean
that particular instances of disassembly may not constitute fair use.
Second, Sega maintains that the language and legislative history of section 906 of the Semiconductor Chip
Protection Act of 1984 (SCPA) establish that Congress did not intend that disassembly of object code be considered
a fair use. Section 906 of the SCPA authorizes the copying of the “mask work” on a silicon chip in the course of
reverse engineering the chip. 17 U.S.C. Section 906 . The mask work in a standard ROM chip, such as those used in
the Genesis console and in genesis-compatible cartridges, is a physical representation of the computer program that
is embedded in the chip. The zeros and ones of binary object code are represented in the circuitry of the mask work
by open and closed switches. Sega contends that Congress’s express authorization of copying in the particular
circumstances set forth in section 906 constitutes a determination that <24 USPQ2d 1569> other forms of copying
of computer programs are prohibited.
The legislative history of the SCPA reveals, however, that Congress passed a separate statute to protect
semiconductor chip products because it believed that semiconductor chips were intrinsically utilitarian articles that
were not protected under the Copyright Act. H.R. Rep. No. 781, 98th Cong., 2d Sess. 8-10, reprinted in 1984
U.S.C.C.A.N. 5750, 5757-59. Accordingly, rather than amend the Copyright Act to extend traditional copyright
protection to chips, it enacted “a sui generis form of protection, apart from and independent of the copyright laws.”
Id. at 10 1984 U.S.C.C.A.N. at 5759. Because Congress did not believe that semiconductor chips were eligible for
copyright protection in the first instance, the fact that it included an exception for reverse engineering of mask work
in the SCPA says nothing about its intent with respect to the lawfulness of disassembly of computer programs under
the Copyright Act. Nor is the fact that Congress did not contemporaneously amend the Copyright Act to permit
disassembly significant, since it was focusing on the protection to be afforded to semiconductor chips. Here we are
dealing not with an alleged violation of the SCPA, but with the copying of a computer program, which is governed by
the Copyright Act. Moreover, Congress expressly stated that it did not intend to “limit, enlarge or otherwise affect
the scope, duration, ownership or subsistence of copyright protection... in computer programs, data bases, or any
other copyrightable works embodied in semiconductor chip products.” Id. at 28, 1984 U.S.C.C.A.N. at 5777.
Accordingly, Sega’s second statutory argument also fails. We proceed to consider Accolade’s fair use defense.
Section 107 lists the factors to be considered in determining whether a particular use is a fair one. Those factors
include:
1. the purpose and character of the use, including whether such use is of a commercial <977
F.2d 1522> nature or is for non-profit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion used in relation to the copyrighted work as a
whole; and
4. the effect of the use upon the potential market for or value of the copyrighted work.
17 U.S.C. Section 107. The statutory factors are not exclusive. Rather, the doctrine of fair use is in essence “an
equitable rule of reason.” Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 560 [225 USPQ 1073]
(1985) (quoting H.R. Rep. No. 1476, 94th Cong., 2d Sess. 65, reprinted in 1976 U.S.C.C.A.N. 5659, 5679). Fair use
is a mixed question of law and fact. Id. . “Where the district court has found facts sufficient to evaluate each of the
statutory factors,” an appellate court may resolve the fair use question as a matter of law. Id..
In determining that Accolade’s disassembly of Sega’s object code did not constitute a fair use, the district court
treated the first and fourth statutory factors as dispositive, and ignored the second factor entirely. Given the nature
and characteristics of Accolade’s direct use of the copied works, the ultimate use to which Accolade put the
functional information it obtained, and the nature of the market for home video entertainment systems, we conclude
that neither the first nor the fourth factor weighs in Sega’s favor. In fact, we conclude that both factors support
Accolade’s fair use defense, as does the second factor, a factor which is important to the resolution of cases such as
the one before us.
(a) With respect to the first statutory factor, we observe initially that the fact that copying is for a commercial
purpose weighs against a finding of fair use. Harper & Row, 471 U.S. at 562. However, the presumption of
unfairness that arises in such cases can be rebutted by the characteristics of a particular commercial use. Hustler
Magazine, Inc. v. Moral Majority, Inc., 796 F.2d 1148, 1152 [230 USPQ 646] (9th Cir. 1986); see also Maxtone-
Graham v. Burtchaell, 803 F.2d 1253, 1262 [231 USPQ 534] (2d Cir. 1986), cert. denied, 481 U.S. 1059 (1987).
Further “[t]he commercial nature of a use is a matter of degree, not an absolute....”Maxtone-Graham,803 F.2d at
1262 .
Sega argues that because Accolade copied its object code in order to produce a competing product, the Harper &
Row presumption applies and precludes a finding of fair use. That analysis is far too simple and ignores a number of
important considerations. We must consider other aspects of “the purpose and character of the use” as well. As we
have noted, the use at issue was an intermediate one only and thus any commercial “exploitation” was indirect or
derivative. <24 USPQ2d 1570> The declarations of Accolade’s employees indicate, and the district court found, that
Accolade copied Sega’s software solely in order to discover the functional requirements for compatibility with the
Genesis console – aspects of Sega’s programs that are not protected by copyright. 17 U.S.C. Section 102(b) . With
respect to the video game programs contained in Accolade’s game cartridges, there is no evidence in the record that
Accolade sought to avoid performing its own creative work. Indeed, most of the games that Accolade released for
use with the Genesis console were originally developed for other hardware systems. Moreover, with respect to the
interface procedures for the Genesis console, Accolade did not seek to avoid paying a customarily charged fee for
use of those procedures, nor did it simply copy Sega’s code; rather, it wrote its own procedures based on what it
had learned through disassembly. Taken together, these facts indicate that although Accolade’s ultimate purpose
was the release of Genesis-compatible games for sale, its direct purpose in copying Sega’s code, and thus its direct
use of the copyrighted material, was simply to study the functional requirements for Genesis compatibility so that it
could modify existing games and make them usable with the Genesis console. Moreover, as we discuss below, no
other method of studying those requirements was available to Accolade. On these facts, we conclude that Accolade
copied <977 F.2d 1523> Sega’s code for a legitimate, essentially non-exploitative purpose, and that the commercial
aspect of its use can best be described as of minimal significance.
We further note that we are free to consider the public benefit resulting from a particular use notwithstanding the
fact that the alleged infringer may gain commercially. See Hustler, 796 F.2d at 1153 (quotingMCA, Inc. v. Wilson,677
F.2d 180, 182 [211 USPQ 577] (2d Cir. 1981)). Public benefit need not be direct or tangible, but may arise because
the challenged use serves a public interest. Id. In the case before us, Accolade’s identification of the functional
requirements for Genesis compatibility has led to an increase in the number of independently designed video game
programs offered for use with the Genesis console. It is precisely this growth in creative expression, based on the
dissemination of other creative works and the unprotected ideas contained in those works, that the Copyright Act
was intended to promote. See Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 111 S. Ct. 1282, 1290
[18 USPQ2d 1275](1991) (citing Harper & Row, 471 U.S. at 556-57 ). The fact that Genesis-compatible video games
are not scholarly works, but works offered for sale on the market, does not alter our judgment in this regard. We
conclude that given the purpose and character of Accolade’s use of Sega’s video game programs, the presumption of
unfairness has been overcome and the first statutory factor weighs in favor of Accolade.
(b) As applied, the fourth statutory factor, effect on the potential market for the copyrighted work, bears a close
relationship to the “purpose and character” inquiry in that it, too, accommodates the distinction between the copying
of works in order to make independent creative expression possible and the simple exploitation of another’s creative
efforts. We must, of course, inquire whether, “if [the challenged use] should become widespread, it would adversely
affect the potential market for the copyrighted work,” Sony Corp. v. Universal City Studios,464 U.S. 417, 451 [220
[USPQ 665] (1984), by diminishing potential sales, interfering with marketability, or usurping the market, Hustler,
796 F.2d at 1155-56 . If the copying resulted in the latter effect, all other considerations might be irrelevant. The
Harper & Row Court found a use that effectively usurped the market for the copyrighted work by supplanting that
work to be dispositive. 471 U.S. at 567-69 .However, the same consequences do not and could not attach to a use
which simply enables the copier to enter the market for works of the same type as the copied work.
Unlike the defendant in Harper & Row, which printed excerpts from President Ford’s memoirs verbatim with the
stated purpose of “scooping” a Timemagazine review of the book, 471 U.S. at 562 , Accolade did not attempt to
“scoop” Sega’s release of any particular game or games, but sought only to become a legitimate competitor in the
field of Genesis-compatible video games. Within that market, it is the characteristics of the game program as
experienced by the user that determine the program’s commercial success. As we have noted, there is nothing in the
record that suggests that Accolade copied any of those elements.
By facilitating the entry of a new competitor, the first lawful one that is not a Sega licensee, Accolade’s disassembly
of Sega’s software undoubtedly “affected” the market for Genesis-compatible games in an indirect fashion. We note,
however, that while no consumer except the most avid devotee of President Ford’s regime might be expected <24
USPQ2d 1571> to buy more than one version of the President’s memoirs, video game users typically purchase more
than one game. There is no basis for assuming that Accolade’s “Ishido” has significantly affected the market for
Sega’s “Altered Beast”, since a consumer might easily purchase both; nor does it seem unlikely that a consumer
particularly interested in sports might purchase both Accolade’s “Mike Ditka Power Football” and Sega’s “Joe
Montana Football”, particularly if the games are, as Accolade contends, not substantially similar. In any event, an
attempt to monopolize <977 F.2d 1524> the market by making it impossible for others to compete runs counter to
the statutory purpose of promoting creative expression and cannot constitute a strong equitable basis for resisting
the invocation of the fair use doctrine. Thus, we conclude that the fourth statutory factor weighs in Accolade’s, not
Sega’s, favor, notwithstanding the minor economic loss Sega may suffer.
(c) The second statutory factor, the nature of the copyrighted work, reflects the fact that not all copyrighted works
are entitled to the same level of protection. The protection established by the Copyright Act for original works of
authorship does not extend to the ideas underlying a work or to the functional or factual aspects of the work. 17
U.S.C. Section 102(b) . To the extent that a work is functional or factual, it may be copied, Baker v. Selden, 101 U.S.
99, 102-04 (1879), as may those expressive elements of the work that “must necessarily be used as incident to”
expression of the underlying ideas, functional concepts, or facts,id. at 104 . Works of fiction receive greater
protection than works that have strong factual elements, such as historical or biographical works, Maxtone-
Graham,803 F.2d at 1263 (citing Rosemont Enterprises, Inc. v. Random House, Inc., 366 F.2d 303, 307 [150 USPQ
715] (2d Cir. 1966), cert. denied, 385 U.S. 1009 [152 USPQ 844] (1967)), or works that have strong functional
elements, such as accounting textbooks, Baker, 101 U.S. at 104 . Works that are merely compilations of fact are
copyrightable, but the copyright in such a work is “thin.” Feist Publications, 111 S. Ct. at 1289 .
Computer programs pose unique problems for the application of the “idea/expression distinction” that determines
the extent of copyright protection. To the extent that there are many possible ways of accomplishing a given task or
fulfilling a particular market demand, the programmer’s choice of program structure and design may be highly
creative and idiosyncratic. However, computer programs are, in essence, utilitarian articles – articles that accomplish
tasks. As such, they contain many logical, structural, and visual display elements that are dictated by the function to
be performed, by considerations of efficiency, or by external factors such as compatibility requirements and industry
demands. Computer Assoc. Int’l, Inc. v. Altai, Inc., 23 U.S.P.Q.2d (BNA) 1241, 1253-56 (2d Cir. 1992) (“CAI“). In
some circumstances, even the exact set of commands used by the programmer is deemed functional rather than
creative for purposes of copyright. “[W]hen specific instructions, even though previously copyrighted, are the only
and essential means of accomplishing a given task, their later use by another will not amount to infringement.”
CONTU Report at 20; see CAI, 23 U.S.P.Q.2d at 1254 .
Because of the hybrid nature of computer programs, there is no settled standard for identifying what is protected
expression and what is unprotected idea in a case involving the alleged infringement of a copyright in computer
software. We are in wholehearted agreement with the Second Circuit’s recent observation that “[t]hus far, many of
the decisions in this area reflect the courts’ attempt to fit the proverbial square peg in a round hole.” CAI,23
U.S.P.Q.2d at 1257 . In 1986, the Third Circuit attempted to resolve the dilemma by suggesting that the idea or
function of a <977 F.2d 1525> computer program is the idea of the program as a whole, and “everything that is not
necessary to that purpose or function [is] part of the expression of that idea.” Whelan Assoc., Inc. v. Jaslow Dental
Laboratory, Inc., 797 F.2d 1222, 1236 [230 USPQ 481] (3d Cir. 1986) (emphasis omitted). The Whelan rule,
however, has been widely – and soundly – criticized as simplistic and overbroad. See CAI,23 U.S.P.Q.2d at 1252
(citing cases, treatises, and articles). In reality, “a computer program’s ultimate function or purpose is the composite
result of interacting subroutines. Since each subroutine is itself a program, and thus, may be said to have its own
‘idea,’Whelan ‘s general formulation... is descriptively inadequate.” Id. For example, the computer program at issue
in the case before us, a video game program, contains at least two such subroutines – the subroutine that allows the
user to interact with the video game and the subroutine that allows the game cartridge to interact with the console.
Under a test that breaks down a computer program into its component subroutines and sub-subroutines and then
identifies the idea <24 USPQ2d 1572> or core functional element of each, such as the test recently adopted by the
Second Circuit in CAI,23 U.S.P.Q.2d at 1252 , many aspects of the program are not protected by copyright. In our
view, in light of the essentially utilitarian nature of computer programs, the Second Circuit’s approach is an
appropriate one.
Sega argues that even if many elements of its video game programs are properly characterized as functional and
therefore not protected by copyright, Accolade copied protected expression. Sega is correct. The record makes clear
that disassembly is wholesale copying. Because computer programs are also unique among copyrighted works in the
form in which they are distributed for public use, however, Sega’s observation does not bring us much closer to a
resolution of the dispute.
The unprotected aspects of most functional works are readily accessible to the human eye. The systems described in
accounting textbooks or the basic structural concepts embodied in architectural plans, to give two examples, can be
easily copied without also copying any of the protected, expressive aspects of the original works. Computer
programs, however, are typically distributed for public use in object code form, embedded in a silicon chip or on a
floppy disk. For that reason, humans often cannot gain access to the unprotected ideas and functional concepts
contained in object code without disassembling that code – i.e., making copies.8Atari Games Corp. v. Nintendo of
America, No. 91-1293, slip op. at 22 [24 USPQ2d 1015] (Fed. Cir. Sept. 10, 1992).
Sega argues that the record does not establish that disassembly of its object code is the only available method for
gaining access to the interface specifications for the Genesis console, and the district court agreed. An independent
examination of the record reveals that Sega misstates its contents, and demonstrates that the district court
committed clear error in this respect.
First, the record clearly establishes that humans cannot readobject code. Sega makes much of Mike Lorenzen’s
statement that a reverse engineer can work directly from the zeros and ones of object code but “[i]t’s not as fun.” In
full, Lorenzen’s statements establish only that the use of an electronicdecompiler is not absolutely necessary. Trained
programmers can disassemble object code by hand. Because even a trained programmer cannot possibly remember
the millions of zeros and ones that make up a program, however, he must make a written or computerized copy of
the disassembled code in order to keep track of his work. See generally Johnson-Laird, Technical Demonstration of
“Decompilation”, reprinted in Reverse Engineering: Legal and Business Strategies for Competitive Design in the
1990’s 102 (Prentice Hall Law & Business ed. 1992). The relevant fact for purposes of Sega’s copyright infringement
claim and Accolade’s fair use <977 F.2d 1526> defense is that translationof a program from object code into source
code cannot be accomplished without making copies of the code.
Second, the record provides no support for a conclusion that a viable alternative to disassembly exists. The district
court found that Accolade could have avoided a copyright infringement claim by “peeling” the chips contained in
Sega’s games or in the Genesis console, as authorized by section 906 of the SCPA, 17 U.S.C. Section 906. Even
Sega’s amici agree that this finding was clear error. The declaration of Dr. Harry Tredennick, an expert witness for
Accolade, establishes that chip peeling yields only a physical diagram of the object code embedded in a ROM chip. It
does not obviate the need to translate object code into source code. Atari Games Corp., slip op. at 22.
The district court also suggested that Accolade could have avoided a copyright infringement suit by programming in
a “clean room”. That finding too is clearly erroneous. A “clean room” is a procedure used in the computer industry in
order to prevent direct copying of a competitor’s code during the development of a competing product. Programmers
in clean rooms are provided only with the functional specifications for the desired program. As Dr. Tredennick
explained, the use of a clean room would not have avoided the need for disassembly because disassembly was
necessary in order to discover the functional specifications for a Genesis-compatible game.
In summary, the record clearly establishes that disassembly of the object code in Sega’s video game cartridges was
necessary in order to understand the functional requirements for Genesis compatibility. The interface procedures for
the Genesis console are distributed for public use only in object code form, and are not visible to the user <24
USPQ2d 1573> during operation of the video game program. Because object code cannot be read by humans, it
must be disassembled, either by hand or by machine. Disassembly of object code necessarily entails copying. Those
facts dictate our analysis of the second statutory fair use factor. If disassembly of copyrighted object code is per se
an unfair use, the owner of the copyright gains a de facto monopoly over the functional aspects of his work –
aspects that were expressly denied copyright protection by Congress. 17 U.S.C. Section 102(b) . In order to enjoy a
lawful monopoly over the idea or functional principle underlying a work, the creator of the work must satisfy the
more stringent standards imposed by the patent laws. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141,
159-64 [9 USPQ2d 1847] (1989). Sega does not hold a patent on the Genesis console.
Because Sega’s video game programs contain unprotected aspects that cannot be examined without copying, we
afford them a lower degree of protection than more traditional literary works. See CAI, 23 U.S.P.Q.2d at 1257 . In
light of all the considerations discussed above, we conclude that the second statutory factor also weighs in favor of
Accolade.9
(d) As to the third statutory factor, Accolade disassembled entire programs written by Sega. Accordingly, the third
factor weighs against Accolade. The fact that an entire work was copied does not, however, preclude a finding of fair
use. Sony Corp., 464 U.S. at 449-50 ; Hustler,795 F.2d at 1155 (“Sony Corp. teaches us that the copying of an entire
work does not preclude fair use per se.”). In fact, where the ultimate (as opposed to direct) use is as <977 F.2d
1527> limited as it was here, the factor is of very little weight. Cf. Wright v. Warner Books, Inc., 953 F.2d 731, 738
[20 USPQ2d 1892] (2d Cir. 1991) .
(e) In summary, careful analysis of the purpose and characteristics of Accolade’s use of Sega’s video game
programs, the nature of the computer programs involved, and the nature of the market for video game cartridges
yields the conclusion that the first, second, and fourth statutory fair use factors weigh in favor of Accolade, while
only the third weighs in favor of Sega, and even then only slightly. Accordingly, Accolade clearly has by far the
better case on the fair use issue.
We are not unaware of the fact that to those used to considering copyright issues in more traditional contexts, our
result may seem incongruous at first blush. To oversimplify, the record establishes that Accolade, a commercial
competitor of Sega, engaged in wholesale copying of Sega’s copyrighted code as a preliminary step in the
development of a competing product. However, the key to this case is that we are dealing with computer software, a
relatively unexplored area in the world of copyright law. We must avoid the temptation of trying to force “the
proverbial square peg in [to] a round hole.” CAI, 23 U.S.P.Q.2d at 1257 .
In determining whether a challenged use of copyrighted material is fair, a court must keep in mind the public policy
underlying the Copyright Act. “‘The immediate effect of our copyright law is to secure a fair return for an “author’s”
creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good.’”
Sony Corp., 464 U.S. at 432 (quoting Twentieth Century Music Corp. v. Aiken,422 U.S. 151, 156 [186 USPQ 65]
(1975)). When technological change has rendered an aspect or application of the Copyright Act ambiguous, “‘the
Copyright Act must be construed in light of this basic purpose.’” Id. . As discussed above, the fact that computer
programs are distributed for public use in object code form often precludes public access to the ideas and functional
concepts contained in those programs, and thus confers on the copyright owner ade facto monopoly over those
ideas and functional concepts. That result defeats the fundamental purpose of the Copyright Act – to encourage the
production of original works by protecting the expressive elements of those works while leaving the ideas, facts, <24
USPQ2d 1574> and functional concepts in the public domain for others to build on. Feist Publications, 111 S. Ct. at
1290 ; see also Atari Games Corp., slip op. at 18-20 .
Sega argues that the considerable time, effort, and money that went into development of the Genesis and Genesis-
compatible video games militate against a finding of fair use. Borrowing from antitrust principles, Sega attempts to
label Accolade a “free rider” on its product development efforts. In Feist Publications, however, the Court
unequivocally rejected the “sweat of the brow” rationale for copyright protection. 111 S. Ct. at 1290-95 .Under the
Copyright Act, if a work is largely functional, it receives only weak protection. “This result is neither unfair nor
unfortunate. It is the means by which copyright advances the progress of science and art.” Id.at 1290 ; see also id.
at 1292 (“In truth, ‘[i]t is just such wasted effort that the proscription against the copyright of ideas and facts... [is]
designed to prevent.’”) (quoting Rosemont Enterprises, Inc. v. Random House, Inc., 366 F.2d 303, 310 [150 USPQ
715] (2d Cir. 1966), cert. denied,305 U.S. 1009 [152 USPQ 844] (1967));CAI, 23 U.S.P.Q.2d at 1257 . Here, while
the work may not be largely functional, it incorporates functional elements which do not merit protection. The
equitable considerations involved weigh on the side of public access. Accordingly, we reject Sega’s argument.
(f) We conclude that where disassembly is the only way to gain access to the ideas and functional elements
embodied in a copyrighted computer program and where there is a legitimate reason for seeking such access,
disassembly is a fair use <977 F.2d 1528> of the copyrighted work, as a matter of law. Our conclusion does not, of
course, insulate Accolade from a claim of copyright infringement with respect to its finished products. Sega has
reserved the right to raise such a claim, and it may do so on remand.
IV. Trademark Issues
Ordinarily in a trademark case, a trademark holder contends that another party is misusing the holder’s mark or is
attempting to pass off goods or services as those of the trademark holder. The other party usually protests that the
mark is not being misused, that there is no actual confusion, or that for some other reason no violation has
occurred. This case is different. Here, both parties agree that there is a misuse of a trademark, both agree that there
is unlawful mislabeling, and both agree that confusion may result. The issue, here, is – which party is primarily
responsible? Which is the wrongdoer – the violator? Is it Sega, which has adopted a security system governing
access to its Genesis III console that displays its trademark and message whenever the initialization code for the
security system is utilized, even when the video game program was manufactured by a Sega competitor? Or is it
Accolade, which, having discovered how to gain access to the Genesis III through the initialization code, uses that
code even though doing so triggers the display of Sega’s trademark and message in a manner that leads observers
to believe that Sega manufactured the Accolade game cartridge? In other words, is Sega the injured party because
its mark is wrongfully attached to an Accolade video game by Accolade? Or is Accolade wronged because its game is
mislabeled as a Sega product by Sega? The facts are relatively straightforward and we have little difficulty answering
the question.
Sega’s trademark security system (TMSS) initialization code not only enables video game programs to operate on the
Genesis III console, but also prompts a screen display of the SEGA trademark and message. As a result, Accolade’s
inclusion of the TMSS initialization code in its video game programs has an effect ultimately beneficial neither to
Sega nor to Accolade. A Genesis III owner who purchases a video game made by Accolade sees Sega’s trademark
associated with Accolade’s product each time he inserts the game cartridge into the console. Sega claims that
Accolade’s inclusion of the TMSS initialization code in its games constitutes trademark infringement and false
designation of origin in violation of sections 32(1)(a) and 43(a) of the Lanham Trademark Act, 15 U.S.C. Sections
1114(1)(a), 1125(a) , respectively. Accolade counterclaims that Sega’s use of the TMSS to prompt a screen display
of its trademark constitutes false designation of origin under Lanham Act section 43(a), 15 U.S.C. Section 1125(a).
Because the TMSS has the effect of regulating access to the Genesis III console, and because there is no indication
in the record of any public or industry awareness of any feasible alternate method of gaining access to the Genesis
III, we hold that Sega is primarily responsible for any resultant confusion. Thus, it has not demonstrated a likelihood
of success on the merits of its Lanham Act claims. Accordingly, the preliminary injunction it obtained must be
dissolved with <24 USPQ2d 1575> respect to the trademark claim also. However, we decline to instruct the district
court to grant Accolade’s request for preliminary injunctive relief at this time. The decision whether to grant such
relief requires the making of factual and equitable determinations in light of the legal conclusions we express here.
Such determinations are best left in the first instance to the district court.
A. False Labeling
Section 32(1)(a) of the Lanham Act creates a cause of action for trademark infringement against any person who,
without the consent of the trademark owner, “use[s] in commerce any reproduction... of a registered mark in
connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection
with which such use is likely to cause confusion, or to cause mistake, or to deceive....” 15 U.S.C. Section 1114(1)
(a) . Section 43(a) proscribes the use in commerce <977 F.2d 1529> of a false designation of origin in connection
with goods or services where such use is “likely to cause confusion, or... mistake.” Id. Section 1125(a) . Both Sega
and Accolade agree that the screen display of the Sega trademark and message creates a likelihood of consumer
confusion regarding the origin of Accolade’s games. The question is: which party is legally responsible for that
confusion? We disagree with the answer given by the district court.
The district court found that Accolade bore primary responsibility for any consumer confusion that resulted from the
display of the false Sega Message. However, Accolade had no desire to cause the Sega Message to appear or
otherwise to create any appearance of association between itself and Sega; in fact, it had precisely the opposite
wish. It used the TMSS initialization code only because it wanted to gain access for its products to the Genesis III,
and was aware of no other method for doing so. On the other hand, while it may not have been Sega’s ultimate goal
to mislabel Accolade’s products, the record is clear that the false labeling was the result of a deliberate decision on
the part of Sega to include in the Genesis III a device which would both limit general access and cause false
labeling. The decision to use the SEGA trademark as an essential element of a functional device that regulates
access and to cause the SEGA trademark and message to be displayed whenever that functional device was
triggered compels us to place primary responsibility for consumer confusion squarely on Sega.
With respect to Accolade, we emphasize that the record clearly establishes that it had only one objective in this
matter: to make its video game programs compatible with the Genesis III console. That objective was a legitimate
and a lawful one. There is no evidence whatsoever that Accolade wished Sega’s trademark to be displayed when
Accolade’s games were played on Sega’s consoles. To the contrary, Accolade included disclaimers on its packaging
materials which stated that “Accolade, Inc. is not associated with Sega Enterprises, Ltd.” When questioned regarding
the Sega Message and its potential effect on consumers, Alan Miller testified that Accolade does not welcome the
association between its product and Sega and would gladly avoid that association if there were a way to do so. Miller
testified that Accolade’s engineers had not been able to discover any way to modify their game cartridges so that the
games would operate on the Genesis III without prompting the screen display of the Sega Message.
In contrast, Sega officials testified that Sega incorporated the TMSS into the Genesis console, known in Asia as the
Mega-Drive, in order to lay the groundwork for the trademark prosecution of software pirates who sell counterfeit
cartridges in Taiwan and South Korea,as well as in the United States.Sega then marketed the redesigned console
worldwide. Sega intended that when Sega game programs manufactured by a counterfeiter were played on its
consoles, the Sega Message would be displayed, thereby establishing the legal basis for a claim of trademark
infringement. However, as Sega certainly knew, the TMSS also had the potential to affect legitimate competitors
adversely. First, Sega should have foreseen that a competitor might discover how to utilize the TMSS, and that when
it did and included the initialization code in its cartridges, its video game programs would also end up being falsely
labeled. Sega should also have known that the TMSS might discourage some competitors from manufacturing
independently developed games for use with the Genesis III console, because they would not want to become the
victims of such a labeling practice. Thus, in addition to laying the groundwork for lawsuits against pirates, Sega
knowingly risked two significant consequences: the false labeling of some competitors’ products and the
discouraging of other competitors from manufacturing Genesis-compatible games. Under the Lanham Act, the
former conduct, at least, is clearly unlawful.
“[T]rademark policies are designed ‘(1) to protect consumers from being misled... (2) to prevent an impairment of
the value of the enterprise which owns the trademark; and <24 USPQ2d 1576> (3) to achieve these ends in a
manner consistent with the objectives of free competition.’” Anti-Monopoly, Inc. v. General <977 F.2d 1530> Mills
Fun Group, 611 F.2d 296, 300-01 [204 USPQ 978] (9th Cir. 1979) (quoting HMH Publishing Co. v. Brincat, 504 F.2d
713, 716 [183 USPQ 141] (9th Cir. 1974)). Sega violated the first and the third of these principles “The trademark is
misused if it serves to limit competition in the manufacture and sales of a product. That is the special province of the
limited monopolies provided pursuant to the patent laws.” Id. at 301 (citation omitted).
Sega makes much of the fact that it did not adopt the TMSS in order to wage war on Accolade in particular, but
rather as a defensive measure against software counterfeiters. It is regrettable that Sega is troubled by software
pirates who manufacture counterfeit products in other areas of the world where adequate copyright remedies are
not available. However, under the Lanham Act, which governs the use of trademarks and other designations of
origin in this country, it is the effect of the message display that matters. Whatever Sega’s intent with respect to the
TMSS, the device serves to limit competition in the market for Genesis-compatible games and to mislabel the
products of competitors. Moreover, by seeking injunctive relief based on the mislabeling it has itself induced, Sega
seeks once again to take advantage of its trademark to exclude its competitors from the market. The use of a mark
for such purpose is inconsistent with the Lanham Act.

B. Functionality
Sega argues that even if the legal analysis we have enunciated is correct, the facts do not support its application to
this case. Specifically, Sega contends that the TMSS does not prevent legitimate unlicensed competitors from
developing and marketing Genesis III-compatible cartridges that do not trigger a display of the Sega trademark and
message. In other words, Sega claims that Accolade could have “engineered around” the TMSS. Accolade strongly
disagrees with Sega’s factual assertions. It contends that the TMSS initialization sequence is a functional feature that
must be included in a video game program by a manufacturer in order for the game to operate on the Genesis III.
Sega’s factual argument stands or falls on the Nagashima declaration and the accompanying modified game
cartridges that Sega introduced at the hearing. Having carefully reviewed the declaration, we conclude that Sega has
not met its burden of establishing nonfunctionality.
Based on the Nagashima declaration and on the modified cartridges, the district court concluded that the TMSS
initialization sequence was not a necessary component of a Genesis-compatible game.10 The court found that
Accolade could have created a game cartridge that lacked the TMSS initialization code but would still operate on the
Genesis III, or could have programmed its games in such a way that the false Sega Message would not be displayed
on the screen. The court further found that either modification could have been accomplished at minimal additional
expense to Accolade. Accordingly, the court ruled that Accolade could not assert a functionality defense.
The question whether a product feature is functional is a question of fact. Inwood Laboratories, Inc. v. Ives
Laboratories, Inc., 456 U.S. 844, 855 [214 USPQ 1] (1982). Determination of the correct legal standard to apply in
evaluating functionality, however, <977 F.2d 1531> is a question of law which we review de novo.Id. at 855 n.15 .
The burden of proving nonfunctionality is on Sega. See Rachel v. Banana Republic, Inc.,831 F.2d 1503, 1506 [4
USPQ2d 1877] (9th Cir. 1987). In the case before us, we conclude that the district court’s finding of nonfunctionality
was based on its use of an incorrect legal standard. Viewed in the correct light, the record before us supports only
one conclusion: The TMSS initialization code is a functional feature of a <24 USPQ2d 1577> Genesis-compatible
game and Accolade may not be barred from using it.
“Functional features of a product are features ‘which constitute the actual benefit that the consumer wishes to
purchase, as distinguished from an assurance that a particular entity made, sponsored, or endorsed a
product.’”Vuitton et Fils S.A. v. J. Young Enterprises, Inc., 644 F.2d 769, 774 [212 USPQ 85] (9th Cir. 1981) (quoting
International Order of Job’s Daughters v. Lindeburg & Co., 633 F.2d 912, 917 [208 USPQ 718] (9th Cir. 1980), cert.
denied, 452 U.S. 941 [213 USPQ 1056] (1981)). A product feature thus is functional “if it is essential to the use or
purpose of the article or if it affects the cost or quality of the article.” Inwood Laboratories, 456 U.S. at 850 n.10
.The Lanham Act does not protect essentially functional or utilitarian product features because such protection would
constitute a grant of a perpetual monopoly over features that could not be patented. Keene Corp. v. Paraflex
Industries, Inc., 653 F.2d 822, 824 [211 USPQ 201] (3d Cir. 1981). Even when the allegedly functional product
feature is a trademark, the trademark owner may not enjoy a monopoly over the functional use of the mark. Job’s
Daughters, 633 F.2d at 918-19 .
In determining whether a product feature is functional, a court may consider a number of factors, including – but
not limited to – “the availability of alternative designs; and whether a particular design results from a comparatively
simple or cheap method of manufacture.” Clamp Mfg. Co. v. Enco Mfg. Co., Inc., 870 F.2d 512, 516 [10 USPQ2d
1226](9th Cir.), cert. denied, 493 U.S. 872 (1989). The availability of alternative methods of manufacture must be
more than merely theoretical or speculative, however. The court must find “that commercially feasible alternative
configurations exist.” Id. (emphasis added). Moreover, some cases have even suggested that in order to establish
nonfunctionality the party with the burden must demonstrate that the product feature “‘serves no purpose other
than identification.’” Keene Corp., 653 F.2d at 826 (quoting SK & F Co. v. Premo Pharmaceutical Laboratories, Inc.,
625 F.2d 1055, 1063 [206 USPQ 964] (3d Cir. 1980)). With these principles in mind, we turn to the question
whether the TMSS initialization code is a functional feature of a Genesis-compatible game.
It is indisputable that, in the case before us, part of “the actual benefit that the consumer wishes to purchase” is
compatibility with the Genesis III console. The TMSS initialization code provides that compatibility. Sega argues that
the modified cartridges that were introduced in the district court establish the actual existence of technically and
commercially feasible alternative methods of gaining access to the Genesis III. The cartridges were prepared by
Nagashima, an employee in Sega’s Hardware Research and Development Department who was “familiar with the
TMSS system”. At most, the Nagashima affidavit establishes that an individual familiar with the operation of the
TMSS can discover a way to engineer around it. It does not establish that a competitor with no knowledge of the
workings of the TMSS could do so. Nor is there any evidence that there was any public or industry awareness of any
alternate method for gaining access to the Genesis III. Evidence that an individual, even an independent expert,
produced one or more cartridges is not sufficient proof that an alternate method exists. What is needed for proof of
that fact is proof of the method itself. Here, such proof is totally lacking. What is also needed is proof that
knowledge of the alternate method exists or is readily available to knowledgeable persons in the industry. That proof
also is totally lacking here. Accordingly, the district court erred as a matter of law in concluding that the Nagashima
declaration and the modified cartridges were sufficient to establish nonfunctionality. <977 F.2d 1532>
Because the TMSS serves the function of regulating access to the Genesis III, and because a means of access to the
Genesis III console without using the TMSS initialization code is not known to manufacturers of competing video
game cartridges, there is an insufficient basis for a finding of nonfunctionality. Moreover, we note that the only
evidence in the record (other than the Nagashima declaration) relating to Accolade’s ability to gain access to the
Genesis III through the use of any process other than the TMSS is the affidavit of Alan Miller. Miller stated that
Accolade’s software engineers – who, absent any evidence to the contrary, we presume to be reasonably competent
representatives of their profession – have not been able to discover such a method. This evidence supports our
conclusion that Sega has not met its burden of establishing nonfunctionality.
Sega argues that it is not required to share with Accolade or with any other competitor the secrets of how the TMSS
works, and how to engineer around it. Sega is correct – the law does not require that it disclose its trade secrets to
Accolade in connection with its effort to prevail on its Lanham Act claim, nor in connection with its effort to defend
itself against Accolade’s counterclaim. Nevertheless, <24 USPQ2d 1578> aLanham Act plaintiff is not entitled to
prevail in litigation solely on the basis of unsupported assertions. Rather, it has a choice. It can take its chances and
proceed to trial without the sensitive evidence. Alternatively, if it believes the evidence important to the resolution of
the dispute, it may seek a protective order from the court pursuant to Federal Rule of Civil Procedure 26(c)(7)
governing discovery. “The protective order is not a substitute for [evidence relevant to the merits]. Its purpose... is
to prevent harm by limiting disclosure of relevant and necessary information.” Micro Motion, Inc. v. Kane Steel Co.,
Inc.,894 F.2d 1318, 1325 [13 USPQ2d 1696] (Fed. Cir. 1990) (emphasis omitted). Upon a showing that a protective
order is warranted, see American Standard, Inc. v. Pfizer Inc., 828 F.2d 734, 739-44 [3 USPQ2d 1817] (Fed. Cir.
1987), the court may restrict access to the disputed material to the opposing party’s counsel, or may allow the
parties to retain independent experts to evaluate material that is subject to the protective order. See, e.g., Safe
Flight Instrument Corp. v. Sundstrand Data Control, Inc., 682 F. Supp. 20, 22 [7 USPQ2d 1823] (D. Del. 1988)
(listing cases). The latter solution is particularly helpful to the court in a case such as this one, in which the dispute
is highly technical in nature. However, neither the district court nor Sega took advantage of this procedure. Thus
there is no independent evidence to support the conclusion offered by Nagashima.
In summary, because Sega did not produce sufficient evidence regarding the existence of a feasible alternative to
the use of the TMSS initialization code, it did not carry its burden and its claim of nonfunctionality fails. Possibly,
Sega will be able to meet its burden of proof at trial. We cannot say. However, we conclude that in light of the
record before the district court, Sega was not entitled to preliminary injunctive relief under the Lanham Act.
C. Accolade’s Request for Preliminary Injunctive Relief
Finally, we decline to order the district court to grant Accolade preliminary injunctive relief on its Lanham Act claim.
If requested, the district court may reconsider that issue in light of the legal principles we <977 F.2d 1533> have set
forth. The parties have presented arguments regarding the hardships they would suffer under various
circumstances. We believe those arguments should be weighed by the district court before any affirmative relief is
ordered. Moreover, the parties may have additional factual material they wish to present regarding the question of
Accolade’s right to preliminary injunctive relief. Pending further consideration of this matter by the district court, we
are content to let the matter rest where it stands, with each party as free to act as it was before the issuance of
preliminary injunctive relief. We are confident that preserving the status quo in this manner will not lead to any
serious inequity. Costs on appeal shall be assessed against Sega.
——o0o——
Derrick D. MOORE, Appellant, vs. COLUMBIA PICTURES INDUSTRIES, INC., a Delaware corporation;
MCA Records, Inc., a California corporation; La'Face, Inc., a California corporation; Antonio Reid and
Kenny Edmonds, also known as L.A. and Babyface, Appellees.
No. 91-2844.
Submitted Feb. 11, 1992
Decided Aug. 14, 1992
Derrick D. Moore, a 28-year old, self-taught, Minneapolis songwriter and musician, composed a song he entitled
"She Can't Stand It" in March, April, and early May 1989. With hopes of gaining a contract, Moore decided to submit
the song to MCA Records. On March 22, 1989, Moore's agent, James Selmer, delivered two cassette tapes to Cheryl
Dickerson, then MCA's Director of Artists and Repertoire, Black Artists Division, in Los Angeles. One of the tapes
contained the instrumental version of "She Can't Stand It." Dickerson asked Selmer to send her a final version of
"She Can't Stand It." Selmer complied with the request and sent her the final version on May 11. Moore registered
the completed song with the United States Copyright Office on June 6, 1989. On the same day, Moore notified one
of the defendants, Columbia Pictures Industries, that it was infringing his copyright through the use of the song "On
Our Own" which was written by defendants, Antonio Reid and Kenny Edmonds. This song was subsequently used as
the theme song in GHOSTBUSTERS II. Columbia promptly denied the charge of copyright infringement. On July 14,
1989, Moore filed an action against Columbia and the other defendants in the United States District Court for the
District of Minnesota alleging infringement of his song "She Can't Stand It."
On February 8, 1991, the defendants jointly moved for summary judgment. The district court granted the motion on
June 27, 1991, ruling that Moore's evidence was "insufficient to find access as a matter of law." It stated that
Moore's evidence on this crucial issue was highly speculative, suggesting only a bare possibility of access; that
defendants' song "On My Own" was not so strikingly similar to Moore's song so as to create an inference of access;
and that Moore had not been able to challenge defendants' claim of independent creation.1 It further stated that
such independent creation alone "has been held to rebut a prima facie case of copying." We affirm.
DISCUSSION
I. To establish copyright infringement, Moore must prove his ownership of the copyright2 and copying by the
defendants. Feist Publications, Inc. v. Rural Tel. Serv. Co., --- U.S. ----, ----, 111 S.Ct. 1282, 1296, 113 L.Ed.2d
358 (1991). Typically, however, the latter element cannot be proven directly. Therefore, copying can be
established by demonstration of access (by the alleged infringer) and substantial similarity (between the works
at issue). See, e.g., Nelson v. PRN Prods., Inc., 873 F.2d 1141, 1142 (8th Cir.), cert. denied, 493 U.S. 994, 110
S.Ct. 544, 107 L.Ed.2d 541 (1989); 3 Melville B. Nimmer, Nimmer on Copyright § 13.01[B] (1992). We turn
initially to the question of access.
Moore can establish access by showing that the defendants had an "opportunity to view or to copy" his work.
See e.g., Sid & Mary Krofft Television Prods., Inc. v. McDonald's Corp., 562 F.2d 1157, 1172 (9th Cir.1977); 3
Nimmer on Copyright § 13.02[A]. Establishing a "bare possibility" of access is not enough; rather, Moore must
prove that the defendants had a "reasonable possibility" of viewing his work. See, e.g., Ferguson v. Nat'l
Broadcasting Co., 584 F.2d 111, 113 (5th Cir.1978); 3 Nimmer on Copyright § 13.02[A]. A reasonable possibility
of access can be established under the "corporate receipt doctrine."
[I]f the defendant is a corporation, the fact that one employee of the corporation has possession of plaintiff's
work should warrant a finding that another employee (who composed defendant's work) had access to plaintiff's
work, where by reason of the physical propinquity between the employees the latter has the opportunity to view
the work in the possession of the former.
3 Nimmer on Copyright § 13.02[A]. Like other courts, we believe that the corporate receipt doctrine applies
where there is a "relationship linking the intermediary and the alleged copier," even though the purported copier
is not an employee of the intermediary. Meta-Film Assoc., Inc. v. MCA, Inc., 586 F.Supp. 1346, 1357
(C.D.Cal.1984); see also Ferguson, 584 F.2d at 113; Intersong-USA v. CBS, Inc., 757 F.Supp. 274, 281
(S.D.N.Y.1991).
II. Moore contends that the district court erred in ruling that Moore has not established a reasonable possibility that
Reid and Edmonds obtained access to "She Can't Stand It" before they composed "On My Own." This case arises
from summary judgment against Moore. Thus, viewing the facts and all reasonable inferences to be drawn
therefrom in the light most favorable to Moore, we must determine whether any genuine issue exists as to any
material fact. See, e.g., Stever v. Indep. School Dist. No. 625, 943 F.2d 845, 849 (8th Cir.1991).3 Given this
standard and based on the facts of this case, we agree with Moore's contention that sufficient facts have been
presented to defeat the defendants' motion for summary judgment on the basis of access.
On March 22, 1989, James Selmer, Moore's manager and agent, met with Cheryl Dickerson, then Senior Director
of Artists and Repertoire, Black Artists Division, in her Los Angeles office to convince MCA to sign a recording
contract with Moore. As part of his presentation to Dickerson, Selmer played several cassette tapes of Moore's
music, including an instrumental version of "She Can't Stand It." According to Selmer, Dickerson responded
enthusiastically to "She Can't Stand It," exclaiming "I like this, I really like this," and told Selmer that her
immediate supervisor and Vice President for Black Music at MCA, Louil Silas, "is going to love this track," and
that she "want[ed] to offer this guy a deal; I want to offer him a contract. Would you get me a tape of six of his
best songs all on one tape so that I can present it to Louil. Would you have Derrick take his time writing the
lyrics [for 'She Can't Stand It']."
Dickerson then asked Selmer if she could keep the tape of "She Can't Stand It." Selmer hesitated, but decided to
do so because of Dickerson's positive reaction to the song. Dickerson also requested that Moore select six of his
best songs, including "She Can't Stand It," and compile them on a tape that she could give to Silas. On May 11,
1989, Selmer forwarded the requested "best of" tape to Dickerson, including a finalized version of "She Can't
Stand It." Silas's "tape log," a book which listed the tape recordings received by Silas, indicates that the
completed version of "She Can't Stand It" reached his desk. Despite Selmer's subsequent efforts to contact
Dickerson, she never responded to his messages and they never talked again regarding Moore's work.
Dickerson's meeting with Selmer typified her responsibilities at MCA, where she was immediately supervised by
Silas, and her duties included signing new recording artists. Dickerson testified that she had personally
introduced Reid and Edmonds to several of MCA's performers. In fact, Dickerson introduced Reid to an MCA
singer who eventually became his wife. Dickerson's office is located around the corner from Silas's office, who
had worked with Reid and Edmonds in the past, sometimes making specific suggestions regarding the
composition of songs. In either February or March of 1989, Silas suggested to Reid and Edmonds that they write
a song for Bobby Brown (for whom Silas had previously produced songs composed by Reid and Edmonds) to
sing for the GHOSTBUSTERS II soundtrack.
Accordingly, during February and March, Reid claims to have created a number of rhythm tracks (i.e., drum
beats) at his Los Angeles home, including the drum beat for "On My Own." On March 21, 1989, he claims he
delivered a copy of these tracks to Edmonds. On March 22, the same day Selmer met with Dickerson, Edmonds
began creating the music to accompany the drum beat. On March 23, Reid and Edmonds composed the lyrics for
"On My Own" with the intent of submitting the song for the GHOSTBUSTERS II soundtrack. The next day, March
24, Reid and Edmonds brought a floppy disc containing their creation to a Hollywood recording studio to transfer
to a master tape. On March 31, Reid and Edmonds called Silas to let him know that they had completed a song
that Silas might want to consider for Bobby Brown to sing for GHOSTBUSTERS II and proceeded to play "On My
Own" for Silas over the phone.
In early April, Reid and Edmonds arranged for Silas to record a copy of "On My Own." After Silas did so, copies
were provided to various individuals, including Bobby Brown and the director of GHOSTBUSTERS II, who liked
the song but suggested a few minor changes, one of which resulted in the song being retitled "On Our Own."
After Reid and Edmonds refined the song, the director agreed to use it in the movie, and MCA released "On Our
Own" as a single in late May 1989 and as a track on the GHOSTBUSTERS II soundtrack a few weeks later.
When we consider these facts and their inferences in the light most favorable to Moore, we conclude that there
was a reasonable possibility that Reid and Edmonds heard Moore's work before they composed "On My Own."
Dickerson, Silas, Reid and Edmonds had on-going professional and personal relationships. Silas had worked
previously with Reid and Edmonds on Bobby Brown songs, and he encouraged the songwriters to submit work
for the GHOSTBUSTERS II soundtrack; similarly, although Dickerson was not directly involved with the
GHOSTBUSTERS II project, she was close to Reid and Edmonds, she introduced Reid to his wife, and Silas
(whose office was around the corner from Dickerson's) was her immediate supervisor. Dickerson obtained a
copy of "She Can't Stand It" on the same day that Reid and Edmonds claimed that they began working on the
music for "On My Own." She was initially so excited over Moore's music that she led Selmer to believe that
Moore would receive a recording contract and told Selmer that Moore should take his time writing the lyrics for
his song, presumably so they would be the same caliber as the instrumental version. Immediately thereafter,
she lost interest in the instrumental version of "She Can't Stand It," and inexplicably never again contacted
Selmer regarding Moore, although she had encouraged him to submit further copies of Moore's work so that
Silas could evaluate it. These events, coupled with the fact that Dickerson's immediate supervisor, Silas,
encouraged Reid and Edmonds, with whom he had worked in the past, to write a song for GHOSTBUSTERS II,
persuade us that there was a reasonable possibility that Reid and Edmonds had access to the instrumental
version of "She Can't Stand It" before they composed "On My Own."
Case law supports our holding. See, e.g., Gaste v. Kaiserman, 863 F.2d 1061, 1066-67 (2d Cir.1988) (jury
reasonably found access where plaintiff alleged that defendant-songwriter obtained a copy of his song through
the defendant's publisher who had received a copy of plaintiff's song nearly twenty years earlier); Kamar Int'l,
Inc. v. Russ Berrie and Co., 657 F.2d 1059, 1062 (9th Cir.1981) (" 'evidence that a third party with whom both
the plaintiff and defendant were dealing had possession of plaintiff's work is sufficient to establish access by the
defendant' " (quoting 3 Nimmer on Copyright § 13.02[A] at 13-11 (1981))); Sanford v. CBS, Inc., 594 F.Supp.
711, 713 (N.D.Ill.1984) (summary judgment for defendant not appropriate where defendant expressed interest
in plaintiff's song, requested to retain a copy of song, and mailed copy to Los Angeles office where alleged
copier could have heard it); Nordstrom v. Radio Corp. of Am., 251 F.Supp. 41, 42 (D.Col.1965) (summary
judgment for defendant not appropriate because plaintiff's work was in defendant's files during a period in which
alleged copier could have accessed those files); compare with Ferguson v. Nat'l Broadcasting Co., Inc., 584 F.2d
111, 113 (5th Cir.1978) (access not found where purported 1973 copier did not have contact with five of the six
recipients of plaintiff's work (each of whom returned plaintiff's work in 1953) and admitted contact with the sixth
recipient but testified that contact was not related to plaintiff or her composition); Novak v. Nat'l Broadcasting
Co., 752 F.Supp. 164, 169-72 (S.D.N.Y.1990) (access not found where network president denied ever reviewing
plaintiff's work and his return of work to the plaintiff conformed with network's policy of returning submissions
without reviewing them).
The case upon which MCA principally relies further supports our view. MCA identifies Meta-Film Associates, Inc.
v. MCA, Inc., 586 F.Supp. 1346 (C.D.Cal.1984), as the leading case on the law of access and argues that the
facts here parallel those in Meta-Film, where the district court concluded that access could only be established
through a "tortious chain of hypothetical transmittals" and held that such a chain was insufficient to demonstrate
access. Id. at 1355.
According to Meta-Film, "[i]n each of the[se] cases [where access had been found reasonably possible], an
individual in a position to provide suggestions or comments with respect to the defendant's work--a supervisory
employee or an employee within the unit from which the defendant's work was developed--had the opportunity
to view the plaintiff's work." Id. at 1357. Here, Dickerson was in a position to provide suggestions (either directly
or via Silas) to Reid and Edmonds and had the opportunity to hear "She Can't Stand It." Thus, "the key feature,
the close relationship linking the intermediary and the alleged copier," seized upon by Meta-Film is present here.
Id. Meta-Film isolated this key feature after reviewing several cases in which access was reasonably possible and
concluded that in each of those cases [t]he "intermediary", the person who had viewed plaintiff's work and was
therefore in a position to transmit it to the copier, either was a supervisor with responsibility for the defendant's
project, was part of the same work unit as the copier, or contributed creative ideas or material to the
defendant's work.
Id. at 1355-56. Here, Silas supervised Reid and Edmonds' work to the extent that he suggested that they submit
a song for the GHOSTBUSTERS II soundtrack and ultimately decided whether to accept their songs for MCA.
Moreover, Silas testified that in the past he had visited Reid and Edmonds while they were working in their
recording studio and made specific suggestions regarding their in-progress compositions. Thus, under Meta-Film
and the cases from which it derived its principle, at least for summary judgment purposes, Moore has
established that the defendants had a reasonable opportunity to view or copy his work. See Morrissey v. Proctor
& Gamble Co., 379 F.2d 675, 677 (1st Cir.1967) (access inferred where plaintiff introduced evidence justifying
the inference that specific company unit responsible for developing contests had received a copy of his allegedly
infringed game, even though company employees denied knowledge of plaintiff's game); Bevan v. Columbia
Broadcasting System, Inc., 329 F.Supp. 601, 610 (S.D.N.Y.1971) (jury should determine access issue because
executive with responsibility for the allegedly infringing work had an opportunity to view the plaintiff's work);
Smith v. Little, Brown & Co., 245 F.Supp. 451, 458 (S.D.N.Y.1965), aff'd 360 F.2d 928 (2d Cir.1966) (access
found where managing editor with knowledge of plaintiff's work supervised juvenile editor, who was also aware
of plaintiff's work, and juvenile editor assisted purported copier in preparing manuscript, which had the same
subject matter of plaintiff's work). We therefore conclude that the district court erred in holding as a matter of
law that Reid and Edmonds did not have a reasonable possibility of access to "She Can't Stand It" before they
composed "On Our Own."
This conclusion does not end our analysis. As we stated at the outset of this discussion, in order to survive
summary judgment, Moore must not only demonstrate access but also must establish a substantial similarity
between his work and the alleged copy. This court previously has addressed the substantial similarity element on
summary judgment. See, e.g., Nelson v. PRN Prods., Inc., 873 F.2d at 1143. Under the law of this court:
Determination of substantial similarity involves a two-step analysis. There must be substantial similarity "not only
of the general ideas but of the expressions of those ideas as well." Sid & Mary Krofft Television Prods., Inc. v.
McDonald's Corp., 562 F.2d 1157, 1164 (9th Cir.1977). First, similarity of ideas is analyzed extrinsically, focusing
on objective similarities in the details of the works. Second, if there is substantial similarity in ideas, similarity of
expression is evaluated using an intrinsic test depending on the response of the ordinary, reasonable person to
the forms of expression.
Hartman v. Hallmark Cards, Inc., 833 F.2d 117, 120 (8th Cir.1987) (citations omitted). Thus, under Hartman, we
first determine whether the details of the works contain objective similarities, and if they do, then we examine
the works to ascertain if they are so dissimilar that ordinary, " 'reasonable minds [can]not differ as to the
absence of substantial similarity in expression.' " Id. (quoting Litchfield v. Spielberg, 736 F.2d 1352, 1355-56
(9th Cir.1984)).
We rely on expert testimony to conduct the extrinsic test. As this court explained in Hartman, "expert opinion
evidence is admissible in connection with the first step of the substantial similarity analysis to show similarity of
ideas." Id. The defendants submitted the affidavits of four witnesses, Timothy Emmons, a professional musician;
Ronald McCurdy, a University of Minnesota music professor; David Rivkin, a producer/songwriter; and Earl
Spielman, a musicologist specializing in the analysis and comparison of musical compositions. Each of MCA's
experts presented detailed affidavits in which they extensively analyzed the components of the songs and
concluded that the components of the respective songs differed. According to Earl Spielman, "[b]ased on my
analysis and comparison, it is my conclusion that the song 'On Our Own' does not share any elements of original
musical expression with Plaintiff's instrumental track that would give rise to any inference of copying." David
Rivkin concurred: "[F]rom my perspective as a composer, arranger, producer and engineer, there are absolutely
no elements of original musical expression in the melodic chord progressions, basic song structure, and bass
lines of the two songs which would give rise to an inference of copying." Ronald McCurdy also agreed: "There is
absolutely no basis from a musicological perspective for concluding that 'On Our Own' is substantially similar to
'She Can't Stand It' or was copied from 'She Can't Stand It.' " More specifically, McCurdy characterized the
melody, harmony, bass and accompaniment lines as "distinctly different," and Rivkin stated that "[t]he pitches,
rhythms, and phrasing of the vocal melodic lines are different virtually throughout [both songs]."
Each of MCA's experts attributed any similarities between the songs as a result of their being from the same "R
& B/hip-hop" genre. According to Rivkin, the "features [of the two songs] are musical ideas common to the R &
B/hip-hop genre or relate to 'timbres' or 'sounds' (and not the compositions of the songs) and do not indicate
original musical expression." Spielman similarly explained that "[w]hatever common general elements do exist
between the two songs stem from the currently popular genre of R & B/hip-hop music to which both
compositions belong...."
Moore offered the expert testimony of Michael McCormick, a professional musician with an expertise in the
interrelationship between computers and music. During a deposition, McCormick testified that "On Our Own"
was copied from "She Can't Stand It." In the sentence following this testimony, however, McCormick admitted
that it was possible that "On Our Own" was not copied from "She Can't Stand It." Thus, Moore's expert wavered
on the most important issue before him. Perhaps this indecision resulted because Moore's expert did not appear
to be intimately familiar with the songs in question. For instance, he admitted that he could not musically classify
the two songs in question and conceded that he could not remember ever before giving the opinion that "On My
Own" was copied from or substantially similar to "She Can't Stand It."
In addition to admitting that he could not classify the songs as part of a particular genre, McCormick conceded
that although he had heard of the term "hip-hop," he had no understanding of what it meant. In fact, even after
he became involved in this case, Moore's expert did not investigate hip-hop music. Thus, he testified that he was
not aware that a particular sound, beat, or base line characterized hip-hop music.
Given the strength and depth of MCA's experts' testimony, particularly in light of the inconclusive and
unsubstantiated testimony of Moore's witness, we are convinced that under the extrinsic test established by
Hartman, a reasonable factfinder could not find that "On Our Own" is substantially similar to "She Can't Stand
It." See, e.g., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89
L.Ed.2d 538 (1986) ("Where the record taken as a whole could not lead a rational trier of fact to find for the
nonmoving party, there is no 'genuine issue for trial.' ") (quoting First Nat'l Bank of Arizona v. Cities Serv. Co.,
391 U.S. 253, 288, 88 S.Ct. 1575, 1592, 20 L.Ed.2d 569 (1968)). Therefore, we agree with the district court's
summary judgment dismissal of this case.5
CONCLUSION
Although Moore has established a reasonable possibility that Reid and Edmonds had an opportunity to copy his
work, he has not demonstrated a substantial similarity between "She Can't Stand It" and "On Our Own." Accordingly,
we affirm the district court's decision to grant the defendants' request for summary judgment.
LAY, Senior Circuit Judge, concurring in part and dissenting in part.
The panel is in agreement that the district court erred in granting defendants' motion for summary judgment on the
issue of accessibility. Where there are conflicting inferences to be drawn from evidentiary facts, the jury, as the trier
of fact, must resolve the conflict. This settled principle is so fundamental that it does not require citation.
My basic disagreement with the majority decision is that it resolves the case on the issue of substantial similarity
when this issue was not passed upon by the district court. The issue was not raised in the appellant's brief. In their
fifty page brief the appellees devote only a page and one-half to their discussion on substantial similarity; the
appellant responds to the issue with a three and one-half page discussion in its reply brief.
The majority now finds no material dispute of fact on the issue of substantial similarity on the basis of its conclusion
that the defendants' experts were more credible than those of the plaintiff. But credibility of expert witnesses is
peculiarly an issue for the jury. However, notwithstanding this truism, the majority's reliance on the testimony of the
various expert witnesses is completely misplaced. The majority correctly observes that expert witnesses may assist a
finder of fact on the extrinsic test relating to similarity of ideas. See Hartman v. Hallmark Cards, Inc., 833 F.2d 117,
120 (8th Cir.1987). Yet the majority, in evaluating the experts' testimony, fails to recognize that the defendants'
experts admitted that there was similarity of ideas. See, e.g., Appellees' App. at 729 (p 7.c), 736 (p 22), 744 (p 8),
751 (p 22), 779-80 (pp 51-52, p 55).
The majority overlooks that the defendants' expert testimony was offered to refute that there was no similarity of
expression between the two songs. In crediting this testimony, the majority directly contradicts the holding of
Hartman where we said: "analytical dissection and expert opinion are not called for under the second step in which
substantial similarity of expression is measured by a different standard--the response of the ordinary, reasonable
person." Hartman, 833 F.2d at 120 (citing Baxter v. MCA, Inc., 812 F.2d 421, 424 (9th Cir.), cert. denied, 484 U.S.
954, 108 S.Ct. 346, 98 L.Ed.2d 372 (1987)); Nelson v. PRN Productions, Inc., 873 F.2d 1141, 1143 (8th Cir.), cert.
denied, 493 U.S. 994, 110 S.Ct. 544, 107 L.Ed.2d 541 (1989).
I feel it would be much fairer to the parties concerned to remand this case to the district court and have it pass upon
the unresolved issues on summary judgment. In this way the parties can have an opportunity to fully brief the issue
on appeal with the benefit of the district court's analysis. (There is even a dispute among the parties over the
admissibility of a tape containing a comparison of the two songs. This should also be resolved by the district court.)
I have played the tape which contains the two musical compositions and although I do not know the difference
between be-bop, hip-hop, and rock and roll, the tunes all sound the same to me. This may be because I have no ear
for music other than reflecting my generation's preference for the more soothing rhythms of Glen Miller and Wayne
King or the sophisticated beat of Woody Herman playing the Wood Chopper's Ball. Obviously judges have no
expertise to resolve this kind of question--which is why jurors should tell us whether a composite vote of reasonable
minds can or cannot find similarity of expression.
——o0o——
Whelan Associates Inc. v. Jaslow Dental Laboratory, Inc., et al
U.S. Court of Appeals, Third Circuit
August 4, 1986
797 F.2d 1222, 230 USPQ 481
Becker, Circuit Judge.
This appeal involves a computer program for the operation of a dental laboratory, and calls upon us to apply the
principles underlying our venerable copyright laws to the relatively new field of computer technology to determine
the scope of copyright protection of a computer program. More particularly, in this case of first impression in the
courts of appeals, we must determine whether the structure (or sequence and organization) 1 of a computer program
is protectible by copyright, or whether the protection of the copyright law extends only as far as the literal computer
code. The district court found that the copyright law covered these non-literal elements of the program, and we
agree. This conclusion in turn requires us to consider whether there was sufficient evidence of substantial similarity
between the structures of the two programs at issue in this case to uphold the district court’s finding of copyright
infringement. Because we find that there was enough evidence, we affirm.
I. Factual Background
Appellant Jaslow Dental Laboratory, Inc. (“Jaslow Lab”) is a Pennsylvania corporation in the business of
manufacturing dental prosthetics and devices. Appellant Dentcom, Inc. (“Dentcom”) is a Pennsylvania corporation in
the business of developing and marketing computer programs for use by dental laboratories. Dentcom was formed
out of the events that gave rise to this suit, and its history will be recounted below. Individual appellants Edward
Jaslow and his son Rand Jaslow are officers and shareholders in both Jaslow Lab and Dentcom. Appellants were
defendants in the district court. Plaintiff-appellee Whelan Associates, Inc. (“Whelan Associates”) is also a
Pennsylvania corporation, engaged in the business of developing and marketing custom computer programs.
Jaslow Lab, like any other small- or medium-sized business of moderate complexity, has significant bookkeeping and
administrative tasks. Each other for equipment must be registered and processed; inventory must be maintained;
customer lists must be continually updated; invoicing, billing, and accounts receivable, must be dealt with. While
many of these functions are common to all businesses, the nature of the dental prosthetics business apparently
requires some variations on the basic theme.
Although Rand Jaslow had not had extensive experience with computers, he believed that the business operations of
Jaslow Lab could be made more efficient if they were computerized. In early 1978, he therefore bought a small
personal computer and tried to teach himself how to program it so that it would be of use to Jaslow Lab. Although
he wrote a program for the computer, he was ultimately not successful, limited by both his lack of expertise and the
relatively small capacity of his particular computer.
A few months later, stymied by his own lack of success but still confident that Jaslow Lab would profit from
computerization, Rand Jaslow hired the Strohl Systems Group, Inc. (“Strohl”), a small corporation that developed
custom-made software to develop a program that would on Jaslow Lab’s new IBM Series One computer and take
care of the lab’s business needs. Jaslow Lab and Strohl entered into an agreement providing that Strohl would
design a system for Jaslow Lab’s needs and that after Strohl had installed the system Strohl could market it to other
dental laboratories. Jaslow Lab would receive a 10% royalty on all such sales. 2 The person at Strohl responsible for
the Jaslow Labs account was Elaine Whelan, an experienced programmer who was an officer and half-owner of
Strohl.
Ms. Whelan’s first step was to visit Jaslow Lab and interview Rand Jaslow and others to learn how the laboratory
worked and what its needs were. She also visited other dental laboratories and interviewed people there, so that she
would better understand the layout, workflow, and administration of dental laboratories generally. After this
education into the ways of dental laboratories – and Jaslow Lab, in particular – Ms. Whelan wrote a program called
Dentalab for Jaslow Lab. Dentalab was written in a computer language known as EDL (Even Driven Language), so
that it would work with IBM Series One machines. The program was completed and was operative at Jaslow Lab
around March 1979.

Presumably with an eye towards exploiting the economic potential of the Dentalab program, Ms. Whelan left Strohl
in November, 1979, to form her own business, Whelan Associates, Inc., which acquired Strohl’s interest in the
Dentalab program. Shortly thereafter, Whelan Associates entered into negotiations with Jaslow Lab for Jaslow Lab to
be Whelan Associates’ sales representative for the Dentalab program. Whelan Associates and Jaslow Lab entered
into an agreement on July 30, 1980, according to which Jaslow Lab agreed to use its “best efforts and to act
diligently in the marketing of the Dentalab package,” and Whelan Associates agreed to “use its best efforts and to
act diligently to improve and augment the previously successfully designed Dentalab package.” App. at 1779. The
agreement stated that Jaslow Lab would receive 35% of the gross price of any programs sold and 5% of the price of
any modifications to the programs. The agreement was for one year and was then terminable by either party on
thirty days’ notice.
The parties’ business relationship worked successfully for two years. 3 During this time, as Rand Jaslow became more
familiar with computer programming, he realized that because Dentalab was written in EDL it could not be used on
computers that many of the smaller dental prosthetics firms were using, for which EDL had not been implemented.
Sensing that there might be a market for a program that served essentially the same function as Dentalab but that
could be used more widely, Rand Jaslow began in May or June of 1982 to develop in his spare time a program in the
BASIC language for such computers. That program, when completed, became the alleged copyright infringer in this
suit; it was called the Dentcom PC program (“Dentcom program”).4
It appears that Rand Jaslow was sanguine about the prospects of his program for smaller computers. After
approximately a year of work, on May 31, 1983, his attorney sent a letter to Whelan Associates giving one month
notice of termination of the agreement between Whelan Associates and Jaslow Lab. 5 The letter stated that Jaslow
Lab considered itself to be the exclusive marketer of the Dentalab program which, the letter dated, “contains
valuable trade secrets of Jaslow Dental Laboratory.” The letter concluded with a thinly veiled threat to Whelan
Associates: “I . . . look for your immediate response confirming that you will respect the rights of Jaslow and not use
or disclose to others the trade secrets of Jaslow.” App. at 1221.
Approximately two months later, on about August 1, Edward and Rand Jaslow, Paul Mohr, and Joseph Cerra formed
defendant-appellant Dentcom to sell the Dentcom program.6 At about the same time, Rand Jaslow and Jaslow Lab
employed a professional computer programmer, Jonathan Novak, to complete the Dentcom program. The program
was soon finished, and Dentcom proceeded to sell it to dental prosthetics companies that had personal computers.
Dentcom sold both the Dentalab and Dentcom programs, and advertised the Dentcom program as “a new version of
the Dentlab computer system.” App. at 178: 1766-69; 1567-73. Despite Jaslow Lab’s May 31 letter warning Whelan
Associates not to sell the Dentalab program, Whelan Associates continued to market Dentalab. This precipitated the
present litigation.
II. Procedural History
On June 30, 1983, Jaslow Lab filed suit in the Court of Common Pleas of Montgomery County (Pennsylvania),
alleging that Whelan Associates had misappropriated its trade secrets. Whelan Associates responded by filing the
instant suit in the United States District Court for the Eastern District of Pennsylvania on September 21, 1983. As set
forth in its amended complaint, Whelan Associates alleged that Dentcom’s licensing of the Dentalab and Dentcom
programs infringed Whelan Associates’ copyright in Dentalab, App. at 452-53; that Dentcom’s use of the terms
“Dentlab” or “Dentalab,” violated Pennsylvania common law and 15 U.S.C. §1125(a) 15 USC 1125 (Lanham
Trademark Act of 1946) (false designation of origin), App. at 454-57; and that Dentcom’s activities violated various
other federal and state laws pertaining to unfair competition and tortious interference with contractual relations,
App. at 457-63. Whelan Associates sought injunctive relief, as well as compensatory and punitive damages. App. at
464-69.
Jaslow Lab and its co-defendants answered, denying all liability. They claimed that Whelan Associates’ copyright was
invalid for two reasons. First, they said that although he had not been listed in the copyright registration, Rand
Jaslow had been a co-author (with Elaine Whelan) of the Dentalab program. The omission of Rand Jaslow from the
registration form, defendants averred, rendered the copyright defective. App. at 506-09. Second, the defendants
maintained that even if Rand Jaslow had not co-authored the program, he owned the copyright because the
program had been written by someone employed by him. App. at 507. Defendants also averred that Rand Jaslow
had developed the Dentcom system independently, and therefore could not have violated Whelan Associate’s
copyright, even if the copyright were valid. 7 Finally, defendants claimed that their use of “Dentalab” or “Dentlab”
violated neither federal nor state law, for, inter alia those terms are merely general descriptions of goods and
services, not names of particular products. App. at 504. Defendants counterclaimed that Whelan Associates had
usurped defendants’ copyright and that by continuing to sell Dentalab, Whelan Associates was engaging in unfair
competition. App. at 505-11. By agreement of the parties, the trade secret action was removed from the Court of
Common Pleas to the district court and became a counterclaim. App. at 509-12.
The first procedural blow was struck by the defendants, who moved almost immediately for a preliminary injunction
to enjoin Whelan Associates from using Jaslow Labs’ trade secrets. After a three-day hearing, the district court
denied the motion in a bench opinion delivered on November 2, 1983. The court held that the defendants had not
shown a likelihood of success on the merits because they had failed to prove that any of Jaslow Lab’s trade secrets
were in the Dentalab program. Moreover, the court held that the defendants had not proven irreparable harm and
that they had approached the court with “unclean hands” on account of their use of the term “Dentlab,” which could
be and was confused for Dentalab. App. 443-44; 446-47.
A quick victory proving beyond the defendants’ reach, the parties prepared for a protracted battle. Discovery
proceeded on each side, and a three-day bench trial began on July 9, 1984. At trial, Whelan Associates continued to
press all of its claims – copyright violations, unfair competition, and tortious interference with contractual relations.
The defendants abandoned the trade secret claim that had failed them in the preliminary injunction battle, but
maintained their position that Rand Jaslow owned the copyright to Dentalab. Defendants continued to deny Whelan
Associates’ allegations.
The principal witnesses were Elaine Whelan, Rand Jaslow, and two expert witnesses, Dr. Thomas Moore for Whelan
Associates and Stephen Ness on behalf of the defendants. Whelan and Jaslow testified about the dealings and
negotiations between the parties. Dr. Moore and Mr. Ness examined the programs and testified about the programs’
similarities and differences. Dr. Moore testified that although the Dentcom program was not a translation of the
Dentalab system, the programs were similar in three significant respects. He testified that most of the file structures,
and the screen outputs, of the programs were virtually identical. App. at 682-704 (file structures); id. at 681-82
(screen outputs). He also testified that five particularly important “subroutines” within both programs – order entry,
invoicing, accounts receivable, end of day procedure, and end of month procedure – performed almost identically in
both programs. App. at 704-18.8 Mr. Ness compared the source and object codes 9 of the Dentalab, Dentcom, and
Datamaster programs, see supra n.4, and testified at length about the many ways that the programs differed from
one another. He concluded that “substantive differences in programming style, in programming structure, in
algorithms and data structures, all indicate that the Dentcom system is not directly derived from either of the other
systems.” App. at 823-24. In his written report, however, which was entered into evidence, Mr. Ness conceded that
the Dentalab and Dentcom programs had “overall structural similarities.” App. at 1798.
The district court ruled for Whelan Associates on all grounds. Whelan Associates v. Jaslow Dental Laboratory, 609
F.Supp. 1307, 225 USPQ 156 (E.D. Pa. 1985). It found that Elaine Whelan was the sole author of the Dentalab
system (and, hence, that Rand Jaslow was not a co-author) and that the contract between Strohl and Rand
Jaslow, see supra n.2, made clear that Strohl would retain full ownership over the software. Whelan Associates v.
Jaslow Dental Laboratory, 609 F.Supp. at 1318-19, 225 USPQ at 164. The court thus concluded that Whelan
Associates’ copyright in the Dentalab System was valid, and that Dentcom’s sales of the Dentalab program were
violations of that copyright.10 Id. at 1320, 225 USPQ at 165.
The court also found that Rand Jaslow had not created the Dentcom system independently, <797 F.2d 1229> and
that the Dentcom system, although written in a different computer language from the Dentalab, and although not a
direct transliteration of Dentalab, was substantially similar to Dentalab because its structure and overall organization
were substantially similar. Id. at 1321-22. (The district court’s opinion on this point is described infra). This
substantial similarity, in conjunction with Rand Jaslow’s acknowledged access to the Dentalab system, led the district
court to conclude that each sale of the Dentcom program by Dentcom 11 violated Whelan Associates’ copyright on the
Dentalab system. The court therefore awarded Whelan Associates damages for these copyright infringements, and
enjoined Dentcom from selling any more copies of the Dentalab or Dentcom programs. Whelan Associates v. Jaslow
Dental Laboratory, 609 F.Supp. at 1322-23, 225 USPQ at 167. The court also held that plaintiffs had exclusive use of
the term “Dentalab,” and enjoined defendants from using either “Dentalab” or “Dentlab” in their business. Id. at
1324-25, 225 USPQ at 169.
The parties filed a series of post-trial motions, primarily concerned with damage calculations and attorneys fees.
Upon the district court’s disposition of these motions, Whelan Associates v. Jaslow Dental Laboratory, 609 F.Supp.
1325,225 USPQ at 169 (E.D. Pa. 1985), the defendants filed their notices of appeal. 12 On appeal, they raise a single
issue: whether the district court erred in its finding that the Dentcom program infringes the copyright of plaintiffs’
Dentalab system.
III. Technological Background
We begin with a brief description of computer programs and an explanation of how they are written. This
introduction is necessary to our analysis of the issues in this case.
A computer program is a set of instructions to the computer. 13 Most programs accept and process user-supplied
data. The fundamental processes utilized by a program are called algorithms (mechanical computational procedures)
and are at the heart of the program. See Keplinger, Computer Software – Its Nature and its Protection, 30 Emory L.
J. 483, 484-85 (1984). These algorithms must be developed by the human creativity of the programmer, and the
program therefore cannot contain any algorithms not already considered by humans. Although a computer cannot
think or develop algorithms, it can execute them faster and more accurately than any human possibly could. See R.
Saltman, Copyright in Computer-Readable Works 59 (1977).
The creation of a program often takes place in several steps, moving from the general to the specific. 14 Because
programs are intended to accomplish particular tasks, the first step in creating the program is identifying the
problem that the computer programmer is trying to solve. In this case, Rand Jaslow went to Strohl and stated that
his problem was recordkeeping for his business. Although this was an accurate statement of the problem, it was not
specific enough to guide Elaine Whelan. Before she could write the Dentalab program, she needed to know more
about Jaslow Lab’s business – how orders were processed, what special billing problems might arise, how inventory
might be correlated to orders, and other characteristics of the dental prosthetics trade.
As the programmer learns more about the problem, she or he may begin to outline a solution. The outline can take
the form of a flowchart, which will break down the solution into a series of smaller units called “subroutines” or
“modules,”15 each of which deals with elements of the larger problem. See Note, Defining the Scope of Copyright
Protection for Computer Software, 38 Stan.L.Rev. 497, 500-01 (1986). A program’s efficiency depends in large part
on the arrangements of its modules and subroutines; although two programs could produce the same result, one
might be more efficient because of different internal arrangements of modules and subroutines. Because efficiency is
a prime concern in computer programs (an efficient program being obviously more valuable than a comparatively
inefficient one), the arrangement of modules and subroutines is a critical factor for any programmer. In the present
case, the Dentalab program had numerous modules pertaining to inventory, accounts receivable, various dentist-
patient matters, and payroll, among others. See App. at 1588-1698 (showing flowcharts of subroutines). Some of
the modules were simple; others were quite complex and involved fairly elaborate logical development.
As the program structure is refined, the programmer must make decisions about what data is needed, where along
the program’s operations the data should be introduced, how the data should be inputted, and how it should be
combined with other data. The arrangement of the data is accomplished by means of data files, discussed infra,and
is affected by the details of the program’s subroutines and modules, for different arrangements of subroutines and
modules may require data in different forms. Once again, there are numerous ways the programmer can solve the
data-organization problems she or he faces. Each solution may have particular characteristics – efficiencies or
inefficiencies, conveniences or quirks – that differentiate it from other solutions and make the overall program more
or less desirable. Because the Dentalab program was intended to handle all of the business-related aspects of a
dental laboratory, it had to accommodate and interrelate many different pieces and types of data including patients’
names, dentists’ names, inventory, accounts receivable, accounts payable, and payroll. 16
Once the detailed design of the program is completed, the coding begins.17 Each of the steps identified in the design
must be turned into a language that the computer can understand. This translation process in itself requires two
steps. The programmer first writes in a “source code,” which may be in one of several languages, such as COBOL,
BASIC, FORTRAN, or EDL.18 The choice of language depends upon which computers the programmer intends the
program to be used by, for some computers can read only certain languages. 19 Once the program is written in
source code, it is translated into “object code,” which is a binary code, simply a concatenation of “O” ‘s and “1” ‘s. In
every program, it is the object code, not the source code, that directs the computer to perform functions. The object
code is therefore the final instruction to the computer.20 21
As this brief summary demonstrates, the coding process is a comparatively small part of programming. By far the
larger portion of the expense and difficulty in creating computer programs is attributable to the development of the
structure and logic of the program, and to debugging, documentation and maintenance, rather than to the
coding. See Frank, Critical Issues in Software 22 (1983) (only 20% of the cost of program development goes into
coding); Zelkowitz, Perspective on Software Engineering, 10 Computing Surveys 197-216 (June, 1978). See also Info
World, Nov. 11, 1985 at 13 (“the ‘look and feel’ of a computer software product often involves much more creativity
and often is of greater commercial value than the program code which implements the product . . .”). The evidence
in this case is that Ms. Whelan spent a tremendous amount of time studying Jaslow Labs, organizing the modules
and subroutines for the Dentalab program, and working out the data arrangements, and a comparatively small
amount of time actually coding the Dentalab program.
IV. Legal Background
A. The elements of a copyright infringement action
To prove that its copyright has been infringed, Whelan Associates must show two things: that it owned the copyright
on Dentalab, and that Rand Jaslow copied Dentalab in making the Dentacom program. Sid & Marty Krofft Television
Prods., Inc. v. McDonald’s Corp., 562 F.2d 1157, 1162, 196 USPQ 97, 100 (9th Cir. 1977); Reyher v. Children’s
Television Workshop, 533 F.2d 87, 90, 190 USPQ 387, 389 (2d Cir. 1985), cert. denied, 429 U.S. 980, 192 USPQ
64 (1976); 3 Nimmer On Copyright §13.01 (1985) [referred to hereinafter as “Nimmer”]. Although it was disputed
below, see supra, the district court determined, and it is not challenged here, that Whelan Associates owned the
copyright to the Dentalab program. We are thus concerned only with whether it has been shown that Rand Jaslow
copied the Dentalab program.
As it is rarely possible to prove copying through direct evidence, Roth Greeting Cards v. United Card Co., 429 F.2d
1106, 1110, 166 USPQ 291, 294 (9th Cir. 1970), copying may be proved inferentially by showing that the defendant
had access to the allegedly infringed copyrighted work and that the allegedly infringing work is substantially similar
to the copyrighted work. Ferguson v. National Broadcasting Co., 584 F.2d 111, 113, 200 USPQ 65 (5th Cir.
1978); Sid & Marty Krofft Television Prods. Inc., supra; Universal Athletic Sales Co. v. Salkeld, 511 F.2d 904,
907, 185 USPQ 76, 77 (3d Cir.), cert. denied, 423 U.S. 863 (1975); Midway Mfg. Co. v. Strohon, 564 F.Supp. 741,
753, 219 USPQ 42, 52 (N.D. Ill. 1983). The district court found, and there it is uncontested that Rand Jaslow had
access to the Dentalab program, both because Dentalab was the program used in Jaslow Labs and because Rand
Jaslow acted as sales representative for Whelan Associates. See Whelan Associates v. Jaslow Dental Laboratory, 609
F.Supp. at 1314, 225 USPQ at 161.22 Thus, the sole question is whether there was substantial similarity between the
Dentcom and Dentalab programs.23
B. The appropriate test for substantial similarity in computer program cases
The leading case of Arnstein v. Porter,154 F.2d 464, 468-69, 68 USPQ 288, 292-93 (2d Cir. 1946), suggested a
bifurcated substantial similarity test whereby a finder of fact makes two findings of substantial similarity to support a
copyright violation. First, the fact-finder must decide whether there is sufficient similarity between the two works in
question to conclude that the alleged infringer used the copyrighted work in making his own. On this issue expert
testimony may be received to aid the trier of fact. (This is called the “extrinsic” test of substantial similarity. Sid &
Marty Krofft Television Prods., Inc. v. McDonald’s Corp., 562 F.2d at 1164-65, 196 USPQ at 102. Second, if the
answer to the first question is in the affirmative, the fact-finder must decide without the aid of expert testimony, but
with the perspective of the “lay observer,” whether the copying was “illicit,” or “an unlawful appropriation” of the
copyrighted work. (This is called an “intrinsic” test of substantial similarity. Id.) The Arnsteintest has been adopted in
this circuit. See Universal Athletic Sales Co., 511 F.2d at 907, 185 USPQ at 78.
The district court heard expert testimony. See supra 12-13;infra at 58-62. It did not bifurcate its analysis, however,
but made only a single finding of substantial similarity. See Whelan Associates v. Jaslow Dental Laboratory, 609
F.Supp. at 1321-22, 225 USPQ at 166. It would thus appear to have contravened the law of this circuit.
Nevertheless, for the reasons that follow, we believe that the district court applied an appropriate standard.
The ordinary observer test, which was developed in cases involving novels, plays, and paintings, and which does not
permit expert testimony, is of doubtful value in cases involving computer programs on account of the programs’
complexity and unfamiliarity to most members of the public. SeeNote, Copyright Infringement of Computer
Programs: A Modification of the Substantial Similarity Test, 68 Minn. L. Rev. 1264, 1285-88
(1984). Cf. Note,Copyright Infringement Actions: The Proper Role for Audience Reactions in Determining Substantial
Similarity, 54 S.Cal. L. Rev. 385 (1981) (criticizing lay observer standard when objects in question are intended for
particular, identifiable audiences). Moreover, the distinction between the two parts of the Arnstein test may be of
doubtful value when the finder of fact is the same person for each step: that person has been exposed to
expert evidence in the first step, yet she or he is supposed to ignore or “forget” that evidence in analyzing the
problem under the second step. Especially in complex cases, we doubt that the “forgetting” can be effective when
the expert testimony is essential to even the most fundamental understanding of the objects in question.
On account of these problems with the standard, we believe that the ordinary observer test is not useful and is
potentially misleading when the subjects of the copyright are particularly complex, such as computer programs. We
therefore join the growing number of courts which do not apply the ordinary observer test in copyright cases
involving exceptionally difficult materials, like computer programs, but instead adopt a single substantial similarity
inquiry according to which both lay and expert testimony would be admissible. See E.F. Johnson Co. v. Uniden
Corp.,623 F.Supp. 1485, 1493, 228 USPQ 891, 896(D.Minn. 1985); Hubco Data Products Corp. v. Management
Assistance Inc., 2Copyright L. Rep. (CCH) ¶25,529 (D. Idaho Feb. 3, 1983) (enunciating bifurcated test, but relying
entirely on expert testimony); Midway Mfg. Co. v. Strohon, 564 F.Supp. 741, 752-53, 219 USPQ 42, 51-52 (N.D. Ill.
1983) (relying entirely on expert testimony to find substantial similarity); see also Fed.R. Evid. 702 (“If [expert
testimony] will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness . . . may
testify thereto in the form of an opinion or otherwise.”). That was the test applied by the district court in this case. 24
C. The arguments on appeal
On appeal, the defendants attack on two grounds the district court’s holding that there was sufficient evidence of
substantial similarity. First, the defendants argue that because the district court did not find any similarity between
the “literal” elements (source and object code) of the programs, but only similarity in their overall structures, its
finding of substantial similarity was incorrect, for the copyright covers only the literal elements of computer
programs, not their overall structures. Defendants’ second argument is that even if the protection of copyright law
extends to “non-literal” elements such as the structure of computer programs, there was not sufficient evidence of
substantial similarity to sustain the district court’s holding in this case. We consider these arguments in turn. 25
V. The Scope Of Copyright Protection Of Computer Programs
It is well, though recently, established that copyright protection extends to a program’s source and object
codes. Stern Elecs., Inc. v. Kaufman, 669 F.2d 852, 855 n.3, 213 USPQ 443, 444 n.3 (2d Cir. 1982) (source
code); Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1246-47, 219 USPQ 113, 118-19 (3d Cir.
1983) (source and object code), cert. dismissed, 464 U.S. 1033 (1984); Williams Elecs., Inc. v. Artic International,
Inc.,685 F.2d 870, 215 USPQ 405 (3d Cir. 1982) (object code). In this case, however, the district court did not find
any copying of the source or object codes, nor did the plaintiff allege such copying. Rather, the district court held
that the Dentalab copyright was infringed because the overall structure of Dentcom was substantially similar to the
overall structure of Dentalab. Whelan Associates v. Jaslow Dental Laboratory, 609 F.Supp. at 1321-22, 225 USPQ at
166. The question therefore arises whether mere similarity in the overall structure of programs can be the basis for a
copyright infringement, or, put differently, whether a program’s copyright protection covers the structure of the
program or only the program’s literal elements, i.e., its source and object codes.
Title 17 U.S.C. §102(a)(1) extends copyright protection to “literary works,” and computer programs are classified as
literary works for the purposes of copyright. See H.R. Rep. No. 1476, 94th Cong., 2d Sess. 54, reprinted in 1976 U.S.
Code Cong. & Ad. News 5659, 5667. The copyrights of other literary works can be infringed even when there is no
substantial similarity between the works’ literal elements. One can violate the copyright of a play or book by copying
its plot or plot devices. See, e.g., Twentieth Century-Fox Film Corp. v. MCA, Inc., 715 F.2d 1327, 1329, 217 USPQ
611, 612(9th Cir. 1983) (13 alleged distinctive plot similarities between Battlestar Galactica andStar Wars may be
basis for a finding of copyright violation); Sid & Marty Krofft Television Productions, Inc., 562 F.2d at 1167, 196
USPQ at 104 (similarities between McDonaldland characters and H.R. Pufnstuf characters can be established by “
‘total concept and feel’ “ of the two productions (quoting Roth Greeting Cards v. United Card Co., 429 F.2d 1106,
1110, 166 USPQ 291, 294 (9th Cir. 1970) ); Sheldon v. Metro-Goldwyn Pictures Corp., 81 F.2d 49, 54-55, 28 USPQ
330, 335-36 (1936); Nichols v. Universal Pictures Corp., 45 F.2d 119, 121, 7 USPQ 84, 96 (2d Cir. 1930) (copyright
“cannot be limited literally to the text, else a plagiarist would escape by immaterial variations”). By analogy to other
literary works, it would thus appear that the copyrights of computer programs can be infringed even absent copying
of the literal elements of the program.26 Defendants contend, however, that what is true of other literary works is
not true of computer programs. They assert two principal reasons, which we consider in turn.
A. Section 102(b) and the dichotomy between idea and expression
It is axiomatic that copyright does not protect ideas, but only expressions of ideas. This rule, first enunciated
in Baker v. Selden, 101 U.S. 99 (1879), has been repeated in numerous cases. See, e.g., Mazer v. Stein, 347 U.S.
201, 217, 100 USPQ 325, 332 (1954) (“Unlike a patent, a copyright gives no exclusive right to the art disclosed;
protection is given only to the expression of the idea – not the idea itself.” [citation omitted]); Universal Athletic
Sales Co., 511 F.2d at 906, 185 USPQ at 78;Dymow v. Bolton, 11 F.2d 690, 691 (2d Cir. 1926); see generally A.
Latman, The Copyright Law 31-35 (5th ed. 1979); 1 Nimmer §2.03[D]. The rule has also been embodied in statute.
Title 17 U.S.C. §102(b) (1982) states:
In no case does copyright protection for an original work of authorship extend to any idea, procedure, process,
system, method of operation, concept, principle, or discovery, regardless of the form in which it is described,
explained, illustrated, or embodied in such work.
The legislative history of this section, adopted in 1976, makes clear that §102(b) was intended to express the idea-
expression dichotomy.See H.R. Rep. No. 1476 at 57 reprinted in 1976 U.S. Code Cong. & Ad. News at 5670 (§102(b)
is intended to “restate . . . that the basic dichotomy between expression and idea remains unchanged.”) See also
Apple Computer, supra, 714 F.2d at 1252, 219 USPQ at 123.
Defendants argue that the structure of a computer program is, by definition, the idea and not the expression of the
idea, and therefore that the structure cannot be protected by the program copyright. Under the defendants’
approach, any other decision would be contrary to §102(b). We divide our consideration of this argument into two
parts. First, we examine the caselaw concerning the distinction between idea and expression, and derive from it a
rule for distinguishing idea from expression in the context of computer programs. We then apply that rule to the
facts of this case.
1. A rule for distinguishing idea from expression in computer programs
It is frequently difficult to distinguish the idea from the expression thereof. No less an authority than Learned Hand,
after a career that included writing some of the leading copyright opinions, concluded that the distinction will
“inevitably be ad hoc.” Peter Pan Fabrics, Inc. v. Martin Weiner Corp., 274 F.2d 487, 489, 124 USPQ 154, 155 (2d
Cir. 1960). See also Knowles & Palmieri, Dissecting Krofft: An Expression of New Ideas in Copyright?, 8 San. Fern.
Val. L. Rev. 109, 126 (1980) (arguing that there can be no meaningful distinction between idea and expression).
Although we acknowledge the wisdom of Judge Hand’s remark, we feel that a review of relevant copyright
precedent will enable us to formulate a rule applicable in this case. In addition, precisely because the line between
idea and expression is elusive, we must pay particular attention to the pragmatic considerations that underlie the
distinction and copyright law generally. In this regard, we must remember that the purpose of the copyright law is to
create the most efficient and productive balance between protection (incentive) and dissemination of information, to
promote learning, culture and development. See U.S. Const. Art. 1 §8 cl. 8 [Copyright Clause] (giving Congress the
power to “promote the Progress of Science and useful Arts”).
We begin our analysis with the case of Baker v. Selden, which, in addition to being a seminal case in the law of
copyright generally, is particularly relevant here because, like the instant case, it involved a utilitarian work, rather
than an artistic or fictional one. In Baker v. Selden, the plaintiff Selden obtained a copyright on his book, “Selden’s
Condensed Ledger, or Bookkeeping Simplified,” which described a new, simplified system of accounting. Included in
the book were certain “blank forms,” pages with ruled lines and headings, for use in Selden’s accounting system.
Selden alleged that Baker had infringed Selden’s copyright by making and selling accounting books that used
substantially the same system as Selden’s and that reproduced Selden’s blank forms. No one disputed that Baker
had the right to use and promulgate Selden’s system of accounting, for all parties agreed that the system could not
be copyrighted, although the Court opined that it might be patentable. Id. at 102. Nor did the parties dispute that
the text of Baker’s book on accounting did not infringe Selden’s copyright. The dispute centered on whether Selden’s
blank forms were part of the method (idea) of Selden’s book, and hence noncopyrightable, or part of the
copyrightable text (expression). Id. at 101.
In deciding this point, the Court distinguished what was protectible from what was not protectible as follows:
[W]here the art [i.e., the method of accounting] it teaches cannot be used without employing the methods and
diagrams used to illustrate the book, or such as are similar to them, such methods and diagrams are to be
considered as necessary incidents to the art, and given to the public.
Id. at 103. Applying this test, the Court held that the blank forms were necessary incidents to Selden’s method of
accounting, and hence were not entitled to any copyright protection. Id. at 104.
The Court’s test in Baker v. Selden suggests a way to distinguish idea from expression. Just as Baker v.
Selden focused on the end sought to be achieved by Selden’s book, the line between idea and expression may be
drawn with reference to the end sought to be achieved by the work in question. In other words, the purpose or
function of a utilitarian work would be the work’s idea, and everything that is not necessary to that purpose or
function would be part of the expression of the idea. Cf. Apple Computer, Inc. v. Formula Int’l Inc., 562 F.Supp. 775,
783, 218 USPQ 47, 53 (C.D. Ca. 1983] [“Apple seeks here not to protect ideas (i.e. making the machine perform
particular functions) but rather to protect their particular expressions . . .”], aff’d. 725 F.2d 521, 221 USPQ 762 (9th
Cir. 1984). Where there are various means of achieving the desired purpose, then the particular means chosen is not
necessary to the purpose; hence, there is expression, not idea.
Consideration of copyright doctrines related to scenes a faire and fact-intensive works supports our formulation, for
they reflect the same underlying principle. Scenes a faire are “incidents, characters or settings which are as a
practical matter indispensable . . . in the treatment of a given topic.” Atari, Inc. v. North American Philips Consumer
Elecs. Corp., 672 F.2d 607, 616, 214 USPQ 33, 40 (7th Cir.), cert. denied, 459 U.S. 880 (1982). See also See v.
Durang,711 F.2d 141, 143, 219 USPQ 771, 772 (9th Cir. 1983). It is well-settled doctrine that scenes a faire are
afforded no copyright protection.
Scenes a faire are afforded no protection because the subject matter represented can be expressed in no other way
than through the particular scene a faire. Therefore, granting a copyright “would give the first author a monopoly on
the commonplace ideas behind the scenes a faire.” Landsberg v. Scrabble Crossword Game Players, Inc., 736 F.2d at
489, 221 USPQ at 1143. This is merely a restatement of the hypothesis advanced above, that the purpose or
function of a work or literary device is part of that device’s “idea” (unprotectible portion). It follows that anything
necessary to effecting that function is also, necessarily, part of the idea, too.
Fact intensive works are given similarly limited copyright coverage. See, e.g., Landsberg, 736 F.2d at 488, 221 USPQ
at 1142; Miller v. Universal City Studios, Inc., 650 F.2d 1365, 1372,212 USPQ 345, 350 [5th Cir. 1981]. Once again,
the reason appears to be that there are only a limited number of ways to express factual material, and therefore the
purpose of the literary work – telling a truthful story – can be accomplished only by employing one of a limited
number of devices. Landsberg, 736 F.2d at 488, 221 USPQ at 1142.Those devices therefore belong to the idea, not
the expression, of the historical or factual work.
Although the economic implications of this rule are necessarily somewhat speculative, we nevertheless believe that
the rule would advance the basic purpose underlying the idea/expression distinction, “the preservation of the
balance between competition and protection reflected in the patent and copyright laws.” Herbert Rosenthal Jewelry
Corp. v. Kalpakian, 446 F.2d 738, 742,170 USPQ 557, 559 (9th Cir. 1971); see also Apple Computer, 714 F.2d at
1253, 219 USPQ at 123 [quoting Kalpakian); supra n. 27. As we stated above, see supra at 21, among the more
significant costs in computer programming are those attributable to developing the structure and logic of the
program. The rule proposed here, which allows copyright protection beyond the literal computer code, would
provide the proper incentive for programmers by protecting their most valuable efforts, while not giving them a
stranglehold over the development of new computer devices that accomplish the same end.
The principal economic argument used against this position – used, that is, in support of the position that programs’
literal elements are the only parts of the programs protected by the copyright law – is that computer programs are
so intricate, each step so dependent on all of the other steps, that they are almost impossible to copy except
literally, and that anyone who attempts to copy the structure of a program without copying its literal elements must
expend a tremendous amount of effort and creativity. In the words of one commentator: “One cannot simply
‘approximate’ the entire copyrighted computer program and create a similar operative program without the
expenditure of almost the same amount of time as the original programmer expended.” Note, 68 Minn. L. Rev. at
1290 (footnote omitted). According to this argument, such work should not be discouraged or penalized. A further
argument against our position is not economic but jurisprudential; another commentator argues that the concept of
structure in computer programs is too vague to be useful in copyright cases. Radcliffe, Recent Developments in
Copyright Law Related to Computer Software, 4 Computer L. Rep. 189, 194-97 (1985). He too would therefore
appear to advocate limiting copyright protection to programs’ literal codes.
Neither of the two arguments just described is persuasive. The first argument fails for two reasons. In the first place,
it is simply not true that “approximation” of a program short of perfect reproduction is valueless. To the contrary,
one can approximate a program and thereby gain a significant advantage over competitors even though additional
work is needed to complete the program. Second, the fact that it will take a great deal of effort to copy a
copyrighted work does not mean that the copier is not a copyright infringer. The issue in a copyrighted case is
simply whether the copyright holder’s expression has been copied, not how difficult it was to do the copying.
Whether an alleged infringer spent significant time and effort to copy an original work is therefore irrelevant to
whether he has pirated the expression of an original work.
As to the second argument, it is surely true that limiting copyright protection to computers’ literal codes would be
simpler and would yield more definite answers than does our answer here. Ease of application is not, however, a
sufficient counterweight to the considerations we have adduced on behalf of our position.
Finally, one commentator argues that the process of development and progress in the field of computer
programming is significantly different from that in other fields, and therefore requires a particularly restricted
application of the copyright law. According to this argument, progress in the area of computer technology is
achieved by means of “stepping-stones,” a process that “requires plagiarizing in some manner the underlying
copyrighted work.” Note, 68 Minn. L. Rev. at 1292 [footnote omitted]. As a consequence, this commentator argues,
giving computer programs too much copyright protection will retard progress in the field.
We are not convinced that progress in computer technology or technique is qualitatively different from progress in
other areas of science or the arts. In balancing protection and dissemination, see supra at 31 & n. 27, the copyright
law has always recognized and tried to accommodate the fact that all intellectual pioneers build on the work of their
predecessors. Thus, copyright principles derived from other areas are applicable in the field of computer programs.
2. Application of the general rule to this case
The rule proposed here is certainly not problem-free. The rule has its greatest force in the analysis of utilitarian or
“functional” works, for the purpose of such works is easily stated and identified. By contrast, in cases involving works
of literature or “non-functional” visual representations, defining the purpose of the work may be difficult. Since it
may be impossible to discuss the purpose or function of a novel, poem, sculpture or painting, the rule may have little
or no application to cases involving such works. The present case presents no such difficulties, for it is clear that the
purpose of the utilitarian Dentalab program was to aid in the business operations of a dental laboratory. See
supra 4-5. It is equally clear that the structure of the program was not essential to that task: there are other
programs on the market, competitors of Dentalab and Dentcom, that perform the same functions but have different
structures and designs.
This fact seems to have been dispositive for the district court:
The mere idea or concept of a computerized program for operating a dental laboratory would not in and of itself be
subject to copyright. Copyright law protects the manner in which the author expresses an idea or concept, but not
the idea itself. Albert E. Price v. Metzner, 574 F.Supp. 281, 219 USPQ 1092 (E.D. Pa. 1983). Copyrights do not
protect ideas – only expressions of ideas. Universal Athletic Sales Co. v. Salkeld, 511 F.2d 904, 908,185 USPQ
76, 78 (3d Cir. 1975). There are many ways that the same data may be organized, assembled, held, retrieved and
utilized by a computer. Different computer systems may functionally serve similar purposes without being copies of
each other. There is evidence in the record that there are other software programs for the business management of
dental laboratories in competition with plaintiff’s program. There is no contention that any of them infringe
although they may incorporate many of the same ideas and functions. The ‘expression of the idea’ in a software
computer program is the manner in which the program operates, controls and regulates the computer in receiving,
assembling, calculating, retaining, correlating, and producing information either on a screen, print-out or by audio
communication.
Whelan Associates v. Jaslow Laboratory, 609 F.Supp. at 1320, 225 USPQ at 165 (emphasis added). We agree. The
conclusion is thus inescapable that the detailed structure of the Dentalab program is part of the expression, not the
idea, of that program.
Our conclusion is supported by SAS Institute, Inc. v. S&H Computer Systems, Inc., 605 F.Supp. 816, 225 USPQ
916 (M.D. Tenn. 1985), the only other case that has addressed this issue specifically, in which the court found that a
program’s copyright could extend beyond its literal elements to its structure and organization. In SAS, plaintiffs
supported their allegation of copyright infringement of their computer program with evidence of both literal and
organizational similarities between its program and the alleged infringer. Id. at 822, 825-26 , 225 USPQ at 919,. The
court found a copyright infringement, and although it did not discuss in detail its evaluation of the evidence, it is
apparent that the organizational similarities of the programs were relevant to its decision. After a brief discussion of
the programs’ literal similarities, the court said:
In addition, the copying proven at trial does not affect only the specific lines of code cited by Dr. Peterson in his
testimony. Rather, to the extent that it represents copying of the organization and structural details of SAS, such
copying pervades the entire S&H product.
Id. at 830 ,225 USPQ at 926. Although the SAS court did not analyze the point in great depth, we are encouraged by
its conclusion.
The Copyright Act of 1976 provides further support, for it indicates that Congress intended that the structure and
organization of a literary work could be part of its expression protectible by copyright. Title 17 U.S.C. §103 (1982)
specifically extends copyright protection to compilations and derivative works. Title 17 U.S.C. §101, defines
“compilation” as “a work formed by the collection and assembling of preexisting materials or of data that are
selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of
authorship,” and it defines “derivative work,” as one “based upon one or more preexisting works, such
as . . . abridgement, condensation, or any other form in which a work may be recast, transformed, or adapted.”
(emphasis added). Although the Code does not use the terms “sequence,” “order” or “structure,” it is clear from the
definition of compilations and derivative works, and the protection afforded them, that Congress was aware of the
fact that the sequencing and ordering of materials could be copyrighted, i.e., that the sequence and order could be
parts of the expression, not the idea, of a work.
Our solution may put us at odds with Judge Patrick Higginbotham’s scholarly opinion in Synercom Technology, Inc.
v. University Computing Co., 462 F.Supp. 1003, 199 USPQ 537 (N.D. Tex. 1978), which dealt with the question
whether the “input formats” of a computer program – the configurations and collations of the information entered
into the program – were idea or expression. The court held that the input formats were ideas, not expressions, and
thus not protectible. Synercom did not deal with precisely the materials at issue here – input formats are structurally
simple as compared to full programs – and it may therefore be distinguishable. However, insofar as the input
formats are devices for the organization of data into forms useful for computers, they are similar to programs;
thus, Synercom is relevant and we must come to grips with it.
Central to Judge Higginbotham’s analysis was his conviction that the organization and structure of the input formats
was inseparable from the idea underlying the formats. Although the court acknowledged that in some cases
structure and sequence might be part of expression, not idea, see id. at 1014 , 199 USPQ at 547, it stated that in
the case of input formats, structure and organization were inherently part of the idea. The court put its position in
the form of a powerful rhetorical question: “if sequencing and ordering [are] expression, what separable idea is
being expressed?” Id.at 1013 , 199 USPQ at 546.
To the extent that Synercom rested on the premise that there was a difference between the copyrightability of
sequence and form in the computer context and in any other context, we think that it is incorrect. As just noted, the
Copyright Act of 1976 demonstrates that Congress intended sequencing and ordering to be protectible in the
appropriate circumstances, see supra, and the computer field is not an exception to this general rule. Although
Congress was aware that computer programs posed a novel set of issues and problems for the copyright law,
Congress did not then make, and has not since made, any special provision for ordering and sequencing in the
context of computer programs. There is thus no statutory basis for treating computer programs differently from
other literary works in this regard.
Despite the fact that copyright protection extends to sequence and form in the computer context, unless we are able
to answer Judge Higginbotham’s powerful rhetorical question – “if sequencing and ordering [are] expression, what
separable idea is being expressed?” – in our own case, we would have to hold that the structure of the Dentalab
program is part of its idea and is thus not protectible by copyright. Our answer has already been given, however: the
idea is the efficient organization of a dental laboratory (presumably, this poses different problems from the efficient
organization of some other kinds of laboratories or businesses). Because there are a variety of program structures
through which that idea can be expressed, the structure is not a necessary incident to that idea.” See supra 39.
B. The CONTU Report – Defendants’ second argument against copyright protection for non-literal elements of
computer programs relies not on venerable principles of copyright law, but on the report of a special congressional
commission. In 1974, concerned that the rapidly developing field of computer technology was outpacing the extant
copyright laws, Congress passed Pub. L. 93-573, §201, 88 Stat. 1873 (1974) creating the National Commission on
New Technological Uses of Copyright Works (CONTU) to study and report on the problems and issues of new
technology and copyright.
In 1976, before CONTU reported its findings to Congress, Congress passed a new copyright law to replace the one
that had prevailed since 1909. Pub.L. No. 94-553, 90 Stat. 2541 (1976) (codified at 17 U.S.C. §101 et seq.). The
new law’s only explicit accommodation to computer technology was 17 U.S.C. §117, which dealt with copyright
issues arising upon certain uses of computer programs not in issue here.
The Commission’s Final Report [hereinafter “CONTU Report”] was delivered to the President on July 31, 1978. The
CONTU Report recommended legislation:
The new copyright law should be amended: (1) to make it explicit that computer programs, to the extent that they
embody an author’s original creation, are proper subject matter for copyright; (2) to apply to all computer uses of
copyrighted programs by the deletion of the present section 117; and (3) to ensure that rightful possessors of copies
of computer programs may use or adapt these copies for their use.
CONTU Report at 1. Congress responded to these suggestions in the 1980 Computer Software Copyright Act by
adding a provision to 17 U.S.C. §101 defining computer programs, see Pub.L. No. 96-517, §10(a), 94 Stat. 3028
(1980) (codified at 17 U.S.C. §101) (quoted supra n.13). It also replaced the old §117 with a new §117 outlining
users’ rights of adaptation.
As neither the definition of “computer program” nor 17 U.S.C. §117 is relevant here, it would appear that the CONTU
Report is of marginal relevance, at best. Nevertheless, defendants argue that it is not only relevant, but that it
compels a decision in their favor. Specifically, defendants argue that the CONTU Report recommends that copyright
protection be limited to protection of the literal elements of computer programs, and that the CONTU Report is to be
taken as authoritative legislative history, which this court is bound to follow. Appellants’ Br. at 15-21. This argument
is unpersuasive, however.
In the first place, the CONTU Report never suggests that copyright protection should be limited to the literal code.
To the contrary, in discussing the limits of copyright protection, the Report referred to the dichotomy between idea
and expression discussed above, and said:
[T]he separation of idea from form of expression . . . is better realized through the courts exercising their judgment
in particular cases [than by a per se rule] . . .Flow charts, source codes, and object codes are works of authorship in
which copyright subsists . . .
CONTU Report at 21 (emphasis added). While the first part of this passage suggests that the Commission may have
reserved judgment as to the copyrightabilty of non-literal elements of computer programs, the second part –
particularly the reference to the copyrightability of flowcharts – demonstrates that the Commission intended
copyright protection to extend beyond the literal code. Thus, the CONTU Report does not support defendants’
position in this case.37
Even if the CONTU Report had advocated a strict limitation of the copyrightability of computer programs, defendants’
argument would still fail, for the CONTU Report is not binding on us in this case. Defendants correctly note that
some courts have treated the CONTU Report as a surrogate legislative history. See, e.g., Micro-Sparc, Inc. v.
Amtype Corp., 592 F.Supp. 33, 35 n.7, 223 USPQ 1210, 1212, n.7 (D. Mass. 1984) (“The CONTU Report . . .
comprises the entire legislative history of §117.”): Midway Mfg. Co. v. Strohon, 564 F.Supp. 741, 750 n.6, 219 USPQ
42, 49 n.6. The courts have said this because Congress adopted the CONTU Report’s recommendations without
alterations and without any committee reports. Defendants argue that this court, too, is bound by the CONTU Report
for the same reason.
The argument fails, however, for the only statutory provision relevant to this case is §102(b) , see supra, in which no
changes were made as a result of the CONTU Report. Therefore, it follows that the CONTU Report cannot be a
substitute for legislative history in this case. In effect, defendants ask us to apply the precepts of the CONTU Report
regardless of what legislative provision we are considering. We cannot do this, however, for the CONTU Report has
force only insofar as it can be said to represent the will of Congress. There is no sense in which it represents the will
of Congress with respect to provisions not amended in response to the Report.
VI. Evidence Of Substantial Similarity
Defendants’ second argument is that even if copyright protection is not limited to computer programs’ literal
elements as a matter of law, there is insufficient evidence of substantial similarity presented in this case to support a
finding of copyright infringement. The defendants claim that all three parts of Dr. Moore’s expert testimony as to the
similarity of the programs, see supra, were flawed, and also that the district court erred in evaluating the relative
weight of Dr. Moore’s and Mr. Ness’ testimony. We consider these arguments in turn.
A. File structures
Defendants claim that Dr. Moore’s examination and conclusions with respect to file structures are irrelevant to the
question whether there was a copyright violation. Defendants analogize files to blank forms, which contain no
information but merely collect and organize information that is entered from another source. They argue, relying
on Baker v. Selden,that, as a matter of law, blank forms cannot be copyrighted. Thus, they conclude, neither can file
structures be part of the copyright of a program. SeeAppellants’ Br. at 34-38; Reply Br. at 7-8.
Defendants’ description of the file structures is indeed correct. Dr. Moore himself described a computer’s file as “a
storage place for data, and it’s really no different in a computer than it is in a file drawer, it’s like a manila folder that
contains all the data on a particular subject category in a computer.” App. at 682. (Another analogy, particularly
accessible to lawyers, is to a very complex cataloging structure like the structure of Lexis or Westlaw without any
entries yet made.) Defendants’ legal conclusion is not correct, however. Although some courts have stated that the
meaning of Baker v. Selden is that blank forms cannot be copyrighted, this circuit, like the majority of courts that
have considered the issue, has rejected this position and instead have held that blank forms may be copyrighted if
they are sufficiently innovative that their arrangement of information is itself informative. Apple Computer, Inc., 714
F.2d at 1250, 219 USPQ at 121.See also Manpower, Inc. v. Temporary Help of Harrisburg, Inc., 246 F.Supp.
788, 148 USPQ 85 (E.D. Pa. 1965) (upholding copyrightability of form for vacation schedules).
This is not to say that all blank forms or computer files are copyrightable. Only those that by their arrangement and
organization convey some information can be copyrighted. Cf. 1 Nimmer at 2-201: “Thus books intended to record
the events of baby’s first year, or a record of a European trip, or any one of a number of other subjects, may evince
considerable originality in suggestions of specific items of information which are to be recorded, and in the
arrangement of such items.” (footnote omitted). Defendants do not contend, however, that the file structures
convey no information, and it appears to us that the structures are sufficiently complex and detailed that such an
argument would not succeed. As we have noted, supra,there are many ways in which the same goal – the
organization of the business aspects of a dental laboratory – might be accomplished, and several of these
approaches might use significantly different file structures. The file structures in the Dentalab and Dentcom systems
require certain information and order that information in a particular fashion. Other programs might require different
information or might use the same information differently. When we compare the comprehensiveness and
complexity of the file structures at issue here with the “blank forms” at issue in the cases mentioned above, we have
no doubt that these file structures are sufficiently informative to deserve copyright protection.
B. Screen outputs
Defendants’ second line of argument is slightly confusing. Defendants appear to argue that to the extent that the
district court relied upon the similarity of the screen outputs of Dentalab and Dentcom its finding of substantial
similarity was erroneous because (1) the screen outputs are covered by a different copyright from the program’s,
and/or (2) the screen outputs bear no relation to the programs that produce them. Although these arguments are
not always clearly distinguished, Appellants’ Br. at 38-41; Reply Br. at 8-10, the distinction is important because
whereas the first argument is weak, we feel that the second is more persuasive.
It is true that screen outputs are considered audio-visual works under the copyright code, see Williams
Electronics, 685 F.2d at 874, 215 USPQ at 408; Midway Manufacturing Co., 564 F.Supp. at 749, 219 USPQ at
48 (distinguishing audiovisual copyright in display of videogame from copyright in program that creates the
audiovisual display), and are thus covered by a different copyright than are programs, which are literary works, see
supra at 27. It is also true that Whelan Associates asserts no claim of copyright infringement with respect to the
screen outputs. But the conclusion to be drawn from this is not, as defendants would have it, that screen outputs
are completely irrelevant to the question whether the copyright in the program has been infringed. Rather, the only
conclusion to be drawn from the fact of the different copyrights is that the screen output cannot be direct evidence
of copyright infringement. There is no reason, however, why material falling under one copyright category could not
be indirect, inferential evidence of the nature of material covered by another copyright.
Thus, the question is whether the screen outputs have probative value concerning the nature of the programs that
render them sufficient to clear the hurdles of Fed.R.Evid. 401 and 403. The defendants argue that the screen
outputs have no probative value with respect to the programs because many different programs can create the
same screen output. Defendants rely on Stern Electronics Inc. v. Kaufman,669 F.2d at 855, 213 USPQ at 444 (“many
different computer programs can produce the same ‘results,’ whether those results are an analysis of financial
records or a sequence of images and sounds.”), and Midway Manufacturing Co., 564 F.Supp. at 749, 219 USPQ at
48 (“it is quite possible to design a game that would infringe Midway’s audiovisual copyright but would use an
entirely different computer program.”). Neither court, however, was presented with the question that faces us today,
the evidentiary value of screen outputs in a suit for infringement of the underlying program. 44
Insofar as everything that a computer does, including its screen outputs, is related to the program that operates it,
there is necessarily a causal relationship between the program and the screen outputs. The screen outputs must
bear some relation to the underlying programs, and therefore they have some probative value. The evidence about
the screen outputs therefore passes the low admissibility threshold of Fed.R.Evid. 401. 45
It is still possible, of course, that the risk of unfair prejudice would outweigh the probative value of the evidence,
thus contravening Fed.R. Evid. 403. In support of this position one might argue that, because the screen outputs are
vivid and easily understood (at least as compared with the obscure details of computer programs), they might have
disproportionate influence on the trier of fact. However, because the portions of programs that relate to the screen
outputs are often so small a part of the full program, they might say very little about the underlying program. This
combination of ease of perception and slight probative value, the argument concludes, works a Rule 403 violation
because the screen outputs appear significantly more probative than they in fact can be.
This argument has force, but we feel that it is ultimately unpersuasive. In the first place, the defendants point to no
place in the record where they objected to testimony about the screens’ similarities. Our independent review of the
record has revealed no such objections. See, e.g.,App. at 681-82 (Dr. Moore testifying about screen similarities
without objection from defendants). Therefore, because this could not be plain error, the objection was waived.
Second, even if the objection had not been waived, we do not believe that admission of the evidence relating to
screen similarity suffices for a Rule 403 exclusion. Screen outputs are not so enticing that a trier of fact could not
evaluate them rationally and with a cool head. The party against whom the screen outputs are introduced can easily
explain their limited probative value. Given the substantial deference with which we review the district court’s
decision on this matter, see McQueeney v. Wilmington Trust Co.,779 F.2d 916, 922 (3d Cir. 1985), and the parties’
ample opportunities to advance their arguments before the district court, we do not believe that the district court
committed error in considering the evidence relating to screen outputs.
C. The five subroutines
With respect to the final piece of evidence, Dr. Moore’s testimony about the five subroutines found in Dentalab and
Dentcom, defendants state that they “fail to understand how a substantial similarity in structurecan be established
by a comparison of only a small fraction of the two works.” Appellants’ Brief at 43, see also Reply Br. at 12. The
premise underlying this declaration is that one cannot prove substantial similarity of two works without comparing
the entirety, or at least the greater part, of the works. We take this premise to be the defendants’ argument.
The premise does not apply in other areas of copyright infringement. There is no general requirement that most of
each of two works be compared before a court can conclude that they are substantially similar. In the cases of
literary works – novels, movies, or plays, for example – it is often impossible to speak of “most” of the work. The
substantial similarity inquiry cannot be simply quantified in such instances. Instead, the court must make a
qualitative, not quantitative judgment about the character of the work as a whole and the importance of the
substantially similar portions of the work. See, e.g., Harper & Row Publishers, Inc. v. Nation Enterprises, ___ U.S.
___, ___ n.8, 105 S.Ct. 2218, 2233-34 & 2233 n.8, 225 USPQ 1073, 1083 & n.8 (1985); Atari, Inc. v. North
American Philips Consumer Electric Corp., 672 F.2d 607, 618, 214 USPQ 33, 42 (7th Cir.), (“When analyzing two
works to determine whether they are substantially similar, courts should be careful not to lose sight of the forest for
the trees.”), cert. denied, 459 U.S. 880 (1982); Hoehling v. Universal City Studios, Inc., 618 F.2d 972, 979-80, 205
USPQ 681, 686-87 (2d Cir.) (warning against same danger), cert. denied, 449 U.S. 841, 207 USPQ 1064(1980). See
also Universal Pictures v. Harold Lloyd Corp., 162 F.2d 354, 73 USPQ 317 (9th Cir. 1947) (finding copyright violation
for copying of 20% of plaintiff’s film); In re Personal Computers and Components Thereof, 1983-84 Copyright L.
Dec. (CCH) ¶25,651 at 18,931 (Int’l Trade Comm’n Mar. 9, 1984) (18%-25% identity is sufficient for substantial
similarity). CompareElsmere Music, Inc. v. National Broadcasting Co., 482 F.Supp. 741, 744, 206 USPQ
913, 914 (S.D.N.Y.), aff’d, 623 F.2d 252, 207 USPQ 277 (2d Cir. 1980) (similarity uncontested by defendants where
four notes out of 100 measures and two words out of 45 were identical) with Jewel Music Publishing Co. v. Leo
Feist, Inc., 62 F.Supp. 596, 597, 66 USPQ 282, 283 (S.D.N.Y. 1945) (finding no substantial similarity where three
bars of an eight-bar line were identical and the line appeared 24 times in both songs).
Computer programs are no different. Because all steps of a computer program are not of equal importance, the
relevant inquiry cannot therefore be the purely mechanical one of whether most of the programs’ steps are similar.
Rather, because we are concerned with the overall similarities between the programs, we must ask whether the
most significant steps of the programs are similar. See Midway Mfg. Co. v. Strohon, supra 564 F.Supp. at 753, 219
USPQ at 52. This is precisely what Dr. Moore did. He testified as follows:
What I decided to do was to look at the programs that had the primary, or let’s say most important, tasks of the
system, and also ones which manipulate files, because there are a lot of programs that simply print lists, or answer a
question when you ask him it, but I thought that the programs which actually showed the flow of information,
through the system, would be the ones that would illustrate the system back.
App. at 704. Dr. Moore’s testimony was thus in accord with general principles of copyright law. As we hold today
that these principles apply as well to computer programs, we therefore reject the defendants’ argument on this
point.
D. Sufficiency of the evidence
Defendants’ final argument is that the district court erred in evaluating the testimony of Dr. Moore and Mr. Ness.
They contend that, properly evaluated, Mr. Ness’ testimony was sufficiently strong and Dr. Moore’s sufficiently weak,
that there was not sufficient evidence of substantial similarity for plaintiff to prevail.
We have described the testimony of Dr. Moore and Mr. Ness, see supra; see also infra, and it is recounted in the
district court opinion, Whelan Associates v. Jaslow Dental Laboratory, 609 F.Supp. at 1316, 225 USPQ at 162.The
district court explained its evaluation of the evidence as follows:
I conclude . . . that Dr. Moore, plaintiffs’ expert, had greater knowledge as to the particular programs at issue. Dr.
Hess [sic], the defendants’ expert witness, reviewed only the source and object codes of the IBM-Series 1 [Dentalab
program], the IBM Datamaster [see supra n. 4], and the IBM-PC Dentcom system. He never observed the computer
in operation nor viewed the various screens or the user’s manual. He stated he was not familiar with EDL coding.
More basically, however, his comparison as to dissimilarities was between the IBM Datamaster and the IBM-PC
Dentcom systems. Plaintiff contends that the IBM-PC Dentcom is a copy of the IBM Series 1 System – not the IBM-
Datamaster system. Dr. Hess’s conclusions were that although the overall structures of those systems is similar, the
code in the IBM-PC Dentcom is not “directly derived” from either plaintiff’s IBM Series-1 or its IBM-Datamaster
system. To the extent that Dr. Moore’s testimony supports plaintiff’s contentions of copying, I find his testimony
more credible and helpful because of his detailed and thorough analysis of the many similarities.
Id. at 1321-22 , 225 USPQ at 166. Determinations of credibility and the relative weight to be given expert witnesses
are, of course, left primarily to the discretion of the district court. Our review of the record convinces us that the
district court’s analysis of the two experts’ opinions was far from being erroneous. As the district court pointed out,
Mr. Ness had studied the programs, but he had never observed them at work in computers. Id. at 1321 ,225 USPQ
at 166. The district court also pointed out that Mr. Ness was unfamiliar with EDL coding. Id. These factors suffice to
support the court’s conclusion.
In addition, we believe, on re-reading the trial transcript, that although Mr. Ness’ testimony was quite competent,
Dr. Moore’s was persuasive on the issues relevant to this appeal. Whereas the greater part of Mr. Ness’ testimony
was concerned with the dissimilarities between the two programs’ source and object codes, see, e.g. App. at 824-32,
Dr. Moore discussed the crucial issue in this case, the similarities and differences in the programs’ structures. For
example, when he discussed the programs’ invoicing subroutine, Dr. Moore testified as follows:
In the DentaLab system, the same kind of thing again, same information is up there, description, unit price,
extension, items and program reads all those things in from te [sic] number of files actually, and displays them and
then gives the operator a number of options to change the order as it appears on the screen to skip this one, to
cancel it, or to accept it.
The same choices are given in Dentalab systems change, skip, cancel.
Assuming that the order is acceptable, both systems then calculate the money, calculate the amount of money that
will be billed, and at this point they use the price code to find which of the four prices are to be charged for this
particular customer. Both systems do that. They pick that one of the four prices and calculate the total amount,
write then the record of this invoice that has been formed to show the invoice’s file, sets the flag in the order’s file to
show that this order has now been invoiced so that it doesn’t get reinvoiced.
Q. What is a flag?
A. Well, a flag would be, in this case, a certain location is marked I for invoices, just an indicator that invoicing has
been done on this record.
Q. Both used it?
A. Both used a flag. I don’t remember whether Dentcom uses a letter I or some other symbol, but there is a flag
there that it’s a field number 12, in which it’s indicated that this file has been invoiced or this order has been
invoiced.
Q. Do you have any comment about the invoicing?
A. Well, I think it should be clear, it was clear to me from going through these programs that there is a very
marke[d] similarity between the two, that they, item by item, are doing pretty much the same thing with the same
fields in the same files, and accomplishing roughly the same results.
So there was quite a match, line by line, between these two, flow in these two.
Q. What do you conclude from that?
A. Well, back together with the file’s structure, sort of set up with the – how the programs have to proceed. I would
think that the person who designed or constructed the DentaLab system must have been thoroughly familiar with
the Dentcom system.
The person who constructed the Dentcom system must have been familiar with the series one system, because the
same file structure and same program steps are followed, same overall flow takes place in both systems.
App. at 710-12 (emphasis added). Dr. Moore’s testimony about Dentcom’s and Dentalab’s month-end subroutines
also demonstrates the structural comparisons in which he engaged:
Q. What did you find in month-end?
A. Okay. Month-end, the calling program in Dentcom, this obviously is done at the end of each month.
In the Dentcom system there is a program called MOEND, which chains all these other programs, that is MOEND
calls MOPRDL, and after that program runs, goes back to MEEND, calls the print sale and so on.
In the Dentalab system there is a supervisory program also called MOEND, and that system calls or runs a series of
programs doing various functions.
Now if we look at the functions done by the programs in order, we find that they are the same except for a flipping
of the order in the first two things.
The Dentcom system, it first prints product group report, and then prints the monthly customer sales analysis.
In Dentlab, just reverses, prints sales analysis first, product group report second.
After that, both systems do the same thing in the same order.
They now do accounts receivable aging, since a month has gone by they have to update all the 30 days, 60 days, et
cetera, calculate service charges. Then they print the monthly AR reports that had to do with service charges, only
those that involve service charges, they both do that. Then they both print the age file balance, balance report, and
following that they print the month and accounts receivable report. That’s the total accounts receivable rport [sic].
Then they both go through and look for accounts that are not active that month, and print a list of these accounts,
accounts not serviced, an account that doesn’t have any access.
The final think that the Dentcom system does is to calculate the new AR total for the entire lab, which I mentioned is
contained in the company file.
DentaLab doesn’t keep that total, so that’s the last item, that is not as far as I can tell, done by DentaLab. I may
have said – did I say Dentcom keeps that total? DentaLab does not. That’s the only difference.
App. at 716-18 (emphasis added). Dr. Moore testified in similar detail and to similar effect about the other three
subroutines that he felt were particularly important, order entry, account receivable, and day’s end. 46 This testimony,
in addition to Dr. Moore’s exhaustive comparison of the two programs’ file structures, see supra 12, and his
testimony about the screen outputs, id., demonstrates the marked similarity between the programs. Defendants’
argument as to sufficiency of the evidence therefore fails.47
VII. Conclusion
We hold that (1) copyright protection of computer programs may extend beyond the programs’ literal code to their
structure, sequence, and organization, and (2) the district court’s finding of substantial similarity between the
Dentalab and Dentcom programs was not clearly erroneous. The judgment of the district court will therefore be
affirmed.
——o0o——
 U.S. Supreme Court
Sony Corporation of America v. Universal City Studios, Inc.
No. 81-1687; 464 U.S. 417
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
Syllabus
Petitioner Sony Corp. manufactures home videotape recorders (VTR's), and markets them through retail
establishments, some of which are also petitioners. Respondents own the copyrights on some of the television
programs that are broadcast on the public airwaves. Respondents brought an action against petitioners in Federal
District Court, alleging that VTR consumers had been recording some of respondents' copyrighted works that had
been exhibited on commercially sponsored television, and thereby infringed respondents' copyrights, and further that
petitioners were liable for such copyright infringement because of their marketing of the VTR's. Respondents sought
money damages, an equitable accounting of profits, and an injunction against the manufacture and marketing of the
VTR's. The District Court denied respondents all relief, holding that noncommercial home use recording of material
broadcast over the public airwaves was a fair use of copyrighted works, and did not constitute copyright
infringement, and that petitioners could not be held liable as contributory infringers even if the home use of a VTR
was considered an infringing use. The Court of Appeals reversed, holding petitioners liable for contributory
infringement and ordering the District Court to fashion appropriate relief
Held: The sale of the VTR's to the general public does not constitute contributory infringement of respondents'
copyrights. Pp. 464 U. S. 428-456.
(a) The protection given to copyrights is wholly statutory, and, in a case like this, in which Congress has not plainly
marked the course to be followed by the judiciary, this Court must be circumspect in construing the scope of rights
created by a statute that never contemplated such a calculus of interests. Any individual may reproduce a
copyrighted work for a "fair use"; the copyright owner does not possess the exclusive right to such a use. Pp. 464 U.
S. 428-434.
(b) Kalem Co. v. Harper Brothers, 222 U. S. 55, does not support respondents' novel theory that supplying the
"means" to accomplish an infringing activity and encouraging that activity through advertisement are sufficient to
establish liability for copyright infringement. This case does not fall in the category of those in which it is manifestly
just to impose vicarious liability because the "contributory" infringer was in a position to control the use of
copyrighted works by others and had authorized the use without permission from the copyright owner. Here, the
only contact between petitioners and the users of the VTR's occurred at the moment of sale. And there is no
precedent for imposing vicarious liability on the theory that petitioners sold the VTR's with constructive knowledge
that their customers might use the equipment to make unauthorized copies of copyrighted material. The sale of
copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the
product is widely used for legitimate, unobjectionable purposes, or, indeed, is merely capable of substantial
noninfringing uses. Pp. 464 U. S. 434-442.
(c) The record and the District Court's findings show (1) that there is a significant likelihood that substantial numbers
of copyright holders who license their works for broadcast on free television would not object to having their
broadcast time-shifted by private viewers (i.e., recorded at a time when the VTR owner cannot view the broadcast
so that it can be watched at a later time); and (2) that there is no likelihood that time-shifting would cause
nonminimal harm to the potential market for, or the value of, respondents' copyrighted works. The VTR's are
therefore capable of substantial noninfringing uses. Private, noncommercial time-shifting in the home satisfies this
standard of noninfringing uses both because respondents have no right to prevent other copyright holders from
authorizing such time-shifting for their programs and because the District Court's findings reveal that even the
unauthorized home time-shifting of respondents' programs is legitimate fair use. Pp. 442-456.
STEVENS, J., delivered the opinion of the Court in which BURGER, C.J., and BRENNAN, WHITE, and O'CONNOR, JJ.,
joined. BLACKMUN, J., filed a dissenting opinion in which MARSHALL, POWELL, and REHNQUIST, JJ., joined, post, p.
464 U. S. 457.
JUSTICE STEVENS delivered the opinion of the Court.
Petitioners manufacture and sell home videotape recorders. Respondents own the copyrights on some of the
television programs that are broadcast on the public airwaves. Some members of the general public use videotape
recorders sold by petitioners to record some of these broadcasts, as well as a large number of other broadcasts. The
question presented is whether the sale of petitioners' copying equipment to the general public violates any of the
rights conferred upon respondents by the Copyright Act.
Respondents commenced this copyright infringement action against petitioners in the United States District Court for
the Central District of California in 1976. Respondents alleged that some individuals had used Betamax videotape
recorders (VTR's) to record some of respondents' copyrighted works which had been exhibited on commercially
sponsored television, and contended that these individuals had thereby infringed respondents' copyrights.
Respondents further maintained that petitioners were liable for the copyright infringement allegedly committed by
Betamax consumers because of petitioners' marketing of the Betamax VTR's. Respondents sought no relief against
any Betamax consumer. Instead, they sought money damages and an equitable accounting of profits from
petitioners, as well as an injunction against the manufacture and marketing of Betamax VTR's.
After a lengthy trial, the District Court denied respondents all the relief they sought and entered judgment for
petitioners. 480 F.Supp. 429 (1979). The United States Court of Appeals for the Ninth Circuit reversed the District
Court's judgment on respondents' copyright claim, holding petitioners liable for contributory infringement and
ordering the District Court to fashion appropriate relief. 659 F.2d 963 (1981). We granted certiorari, 457 U.S. 1116
(1982); since we had not completed our study of the case last Term, we ordered reargument, 463 U. S. 1226
(1983). We now reverse.
An explanation of our rejection of respondents' unprecedented attempt to impose copyright liability upon the
distributors of copying equipment requires a quite detailed recitation of the findings of the District Court. In
summary, those findings reveal that the average member of the public uses a VTR principally to record a program
he cannot view as it is being televised, and then to watch it once at a later time. This practice, known as "time-
shifting," enlarges the television viewing audience. For that reason, a significant amount of television programming
may be used in this manner without objection from the owners of the copyrights on the programs. For the same
reason, even the two respondents in this case, who do assert objections to time-shifting in this litigation, were
unable to prove that the practice has impaired the commercial value of their copyrights or has created any likelihood
of future harm. Given these findings, there is no basis in the Copyright Act upon which respondents can hold
petitioners liable for distributing VTR's to the general public. The Court of Appeals' holding that respondents are
entitled to enjoin the distribution of VTR's, to collect royalties on the sale of such equipment, or to obtain other
relief, if affirmed, would enlarge the scope of respondents' statutory monopolies to encompass control over an article
of commerce that is not the subject of copyright protection. Such an expansion of the copyright privilege is beyond
the limits of the grants authorized by Congress.
I of future harm from the use of VTR's for time-shifting. 480 F.Supp. at 469.
The two respondents in this action, Universal City Studios, Inc., and Walt Disney Productions, produce and hold the
copyrights on a substantial number of motion pictures and other audiovisual works. In the current marketplace, they
can exploit their rights in these works in a number of ways: by authorizing theatrical exhibitions, by licensing limited
showings on cable and network television, by selling syndication rights for repeated airings on local television
stations, and by marketing programs on prerecorded videotapes or videodiscs. Some works are suitable for
exploitation through all of these avenues, while the market for other works is more limited.
Petitioner Sony manufactures millions of Betamax videotape recorders and markets these devices through numerous
retail establishments, some of which are also petitioners in this action. Sony's Betamax VTR is a mechanism
consisting of three basic components: (1) a tuner, which receives electromagnetic signals transmitted over the
television band of the public airwaves and separates them into audio and visual signals; (2) a recorder, which
records such signals on a magnetic tape; and (3) an adapter, which converts the audio and visual signals on the
tape into a composite signal that can be received by a television set.
Several capabilities of the machine are noteworthy. The separate tuner in the Betamax enables it to record a
broadcast off one station while the television set is tuned to another channel, permitting the viewer, for example, to
watch two simultaneous news broadcasts by watching one "live" and recording the other for later viewing. Tapes
may be reused, and programs that have been recorded may be erased either before or after viewing. A timer in the
Betamax can be used to activate and deactivate the equipment at predetermined times, enabling an intended viewer
to record programs that are transmitted when he or she is not at home. Thus a person may watch a program at
home in the evening even though it was broadcast while the viewer was at work during the afternoon. The Betamax
is also equipped with a pause button and a fast-forward control. The pause button, when depressed, deactivates the
recorder until it is released, thus enabling a viewer to omit a commercial advertisement from the recording,
provided, of course, that the viewer is present when the program is recorded. The fast-forward control enables the
viewer of a previously recorded program to run the tape rapidly when a segment he or she does not desire to see is
being played back on the television screen.
The respondents and Sony both conducted surveys of the way the Betamax machine was used by several hundred
owners during a sample period in 1978. Although there were some differences in the surveys, they both showed that
the primary use of the machine for most owners was "time-shifting" -- the practice of recording a program to view it
once at a later time, and thereafter erasing it. Time-shifting enables viewers to see programs they otherwise would
miss because they are not at home, are occupied with other tasks, or are viewing a program on another station at
the time of a broadcast that they desire to watch. Both surveys also showed, however, that a substantial number of
interviewees had accumulated libraries of tapes. Sony's survey indicated that over 80% of the interviewees watched
at least as much regular television as they had before owning a Betamax. Respondents offered no evidence of
decreased television viewing by Betamax owners.
Sony introduced considerable evidence describing television programs that could be copied without objection from
any copyright holder, with special emphasis on sports, religious, and educational programming. For example, their
survey indicated that 7.3% of all Betamax use is to record sports events, and representatives of professional
baseball, football, basketball, and hockey testified that they had no objection to the recording of their televised
events for home use.
Respondents offered opinion evidence concerning the future impact of the unrestricted sale of VTR's on the
commercial value of their copyrights. The District Court found, however, that they had failed to prove any likelihood
The District Court's Decision
The lengthy trial of the case in the District Court concerned the private, home use of VTR's for recording programs
broadcast on the public airwaves without charge to the viewer. No issue concerning the transfer of tapes to other
persons, the use of home-recorded tapes for public performances, or the copying of programs transmitted on pay or
cable television systems was raised. See id. at 432-433, 442.
The District Court concluded that noncommercial home use recording of material broadcast over the public airwaves
was a fair use of copyrighted works, and did not constitute copyright infringement. It emphasized the fact that the
material was broadcast free to the public at large, the noncommercial character of the use, and the private character
of the activity conducted entirely within the home. Moreover, the court found that the purpose of this use served the
public interest in increasing access to television programming, an interest that "is consistent with the First
Amendment policy of providing the fullest possible access to information through the public airwaves. Columbia
Broadcasting System, Inc. v. Democratic National Committee, 412 U. S. 94, 412 U. S. 102."
Id. at 454. Even when an entire copyrighted work was recorded, the District Court regarded the copying as fair use
"because there is no accompanying reduction in the market for plaintiff's original work.'" Ibid. .
As an independent ground of decision, the District Court also concluded that Sony could not be held liable as a
contributory infringer even if the home use of a VTR was considered an infringing use. The District Court noted that
Sony had no direct involvement with any Betamax purchasers who recorded copyrighted works off the air. Sony's
advertising was silent on the subject of possible copyright infringement, but its instruction booklet contained the
following statement:
"Television programs, films, videotapes and other materials may be copyrighted. Unauthorized recording of such
material may be contrary to the provisions of the United States copyright laws."
The District Court assumed that Sony had constructive knowledge of the probability that the Betamax machine
would be used to record copyrighted programs, but found that Sony merely sold a "product capable of a variety of
uses, some of them allegedly infringing." Id. at 461. It reasoned:
"Selling a staple article of commerce -- e.g., a typewriter, a recorder, a camera, a photocopying machine --
technically contributes to any infringing use subsequently made thereof, but this kind of 'contribution,' if deemed
sufficient as a basis for liability, would expand the theory beyond precedent, and arguably beyond judicial
management."
". . . Commerce would indeed be hampered if manufacturers of staple items were held liable as contributory
infringers whenever they 'constructively' knew that some purchasers on some occasions would use their product for
a purpose which a court later deemed, as a matter of first impression, to be an infringement."
Finally, the District Court discussed the respondents' prayer for injunctive relief, noting that they had asked for an
injunction either preventing the future sale of Betamax machines or requiring that the machines be rendered
incapable of recording copyrighted works off the air. The court stated that it had "found no case in which the
manufacturers, distributors, retailers and advertisers of the instrument enabling the infringement were sued by the
copyright holders," and that the request for relief in this case "is unique." Id. at 465.
It concluded that an injunction was wholly inappropriate because any possible harm to respondents was outweighed
by the fact that "the Betamax could still legally be used to record noncopyrighted material or material whose owners
consented to the copying. An injunction would deprive the public of the ability to use the Betamax for this
noninfringing off-the-air recording."
The Court of Appeals' Decision
The Court of Appeals reversed the District Court's judgment on respondents' copyright claim. It did not set aside any
of the District Court's findings of fact. Rather, it concluded as a matter of law that the home use of a VTR was not a
fair use, because it was not a "productive use." It therefore held that it was unnecessary for plaintiffs to prove any
harm to the potential market for the copyrighted works, but then observed that it seemed clear that the cumulative
effect of mass reproduction made possible by VTR's would tend to diminish the potential market for respondents'
works. 659 F.2d at 974.
On the issue of contributory infringement, the Court of Appeals first rejected the analogy to staple articles of
commerce such as tape recorders or photocopying machines. It noted that such machines "may have substantial
benefit for some purposes" and do not "even remotely raise copyright problems." Id. at 975. VTR's, however, are
sold "for the primary purpose of reproducing television programming," and "[v]irtually all" such programming is
copyrighted material. Ibid. The Court of Appeals concluded, therefore, that VTR's were not suitable for any
substantial noninfringing use even if some copyright owners elect not to enforce their rights.
The Court of Appeals also rejected the District Court's reliance on Sony's lack of knowledge that home use
constituted infringement. Assuming that the statutory provisions defining the remedies for infringement applied also
to the nonstatutory tort of contributory infringement, the court stated that a defendant's good faith would merely
reduce his damages liability, but would not excuse the infringing conduct. It held that Sony was chargeable with
knowledge of the homeowner's infringing activity because the reproduction of copyrighted materials was either "the
most conspicuous use" or "the major use" of the Betamax product. Ibid.
On the matter of relief, the Court of Appeals concluded that "statutory damages may be appropriate" and that the
District Court should reconsider its determination that an injunction would not be an appropriate remedy; and,
referring to "the analogous photocopying area," suggested that a continuing royalty pursuant to a judicially created
compulsory license may very well be an acceptable resolution of the relief issue. Id. at 976.
II
Article I, § 8, of the Constitution provides:
"The Congress shall have Power . . . To Promote the Progress of Science and useful Arts, by securing for limited
Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries. "
The monopoly privileges that Congress may authorize are neither unlimited nor primarily designed to provide a
special private benefit. Rather, the limited grant is a means by which an important public purpose may be achieved.
It is intended to motivate the creative activity of authors and inventors by the provision of a special reward, and to
allow the public access to the products of their genius after the limited period of exclusive control has expired.
"The copyright law, like the patent statutes, makes reward to the owner a secondary consideration. In Fox Film
Corp. v. Doyal, 286 U. S. 123, 286 U. S. 127, Chief Justice Hughes spoke as follows respecting the copyright
monopoly granted by Congress,"
"The sole interest of the United States and the primary object in conferring the monopoly lie in the general benefits
derived by the public from the labors of authors."
"It is said that reward to the author or artist serves to induce release to the public of the products of his creative
genius."
United States v. Paramount Pictures, Inc., 334 U. S. 131, 334 U. S. 158 (1948).
As the text of the Constitution makes plain, it is Congress that has been assigned the task of defining the scope of
the limited monopoly that should be granted to authors or to inventors in order to give the public appropriate access
to their work product. Because this task involves a difficult balance between the interests of authors and inventors in
the control and exploitation of their writings and discoveries on the one hand, and society's competing interest in the
free flow of ideas, information, and commerce on the other hand, our patent and copyright statutes have been
amended repeatedly.
From its beginning, the law of copyright has developed in response to significant changes in technology. Indeed, it
was the invention of a new form of copying equipment -- the printing press -- that gave rise to the original need for
copyright protection. Repeatedly, as new developments have occurred in this country, it has been the Congress that
has fashioned the new rules that new technology made necessary. Thus, long before the enactment of the Copyright
Act of 1909, 35 Stat. 1075, it was settled that the protection given to copyrights is wholly statutory. Wheaton v.
Peters, 8 Pet. 591, 33 U. S. 661-662 (1834). The remedies for infringement "are only those prescribed by Congress."
Thompson v. Hubbard, 131 U. S. 123, 131 U. S. 151 (1889).
The judiciary's reluctance to expand the protections afforded by the copyright without explicit legislative guidance is
a recurring theme. See, e.g., Teleprompter Corp. v. Columbia Broadcasting System, Inc., 415 U. S. 394 (1974);
Fortnightly Corp. v. United Artists Television, Inc., 392 U. S. 390 (1968); White-Smith Music Publishing Co. v. Apollo
Co., 209 U. S. 1 (1908); Williams & Wilkins Co. v. United States, 203 Ct.Cl. 74, 487 F.2d 1345 (1973), aff'd by an
equally divided Court, 420 U. S. 376 (1975). Sound policy, as well as history, supports our consistent deference to
Congress when major technological innovations alter the market for copyrighted materials. Congress has the
constitutional authority and the institutional ability to accommodate fully the varied permutations of competing
interests that are inevitably implicated by such new technology.
In a case like this, in which Congress has not plainly marked our course, we must be circumspect in construing the
scope of rights created by a legislative enactment which never contemplated such a calculus of interests. In doing
so, we are guided by Justice Stewart's exposition of the correct approach to ambiguities in the law of copyright:
"The limited scope of the copyright holder's statutory monopoly, like the limited copyright duration required by the
Constitution, reflects a balance of competing claims upon the public interest: creative work is to be encouraged and
rewarded, but private motivation must ultimately serve the cause of promoting broad public availability of literature,
music, and the other arts. The immediate effect of our copyright law is to secure a fair return for an 'author's'
creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good.
'The sole interest of the United States and the primary object in conferring the monopoly,' this Court has said, 'lie in
the general benefits derived by the public from the labors of authors.' Fox Film Corp. v. Doyal, 286 U. S. 123, 286 U.
S. 127. See Kendall v. Winsor, 21 How. 322, 62 U. S. 327-328; Grant v. Raymond, 6 Pet. 218, 31 U. S. 241-242.
When technological change has rendered its literal terms ambiguous, the Copyright Act must be construed in light of
this basic purpose."
Twentieth Century Music Corp. v. Aiken, 422 U. S. 151, 422 U. S. 156 (1975) (footnotes omitted).
Copyright protection "subsists . . . in original works of authorship fixed in any tangible medium of expression." 17
U.S.C. § 102(a) (1982 ed.). This protection has never accorded the copyright owner complete control over all
possible uses of his work. Rather, the Copyright Act grants the copyright holder "exclusive" rights to use and to
authorize the use of his work in five qualified ways, including reproduction of the copyrighted work in copies. § 106.
All reproductions of the work, however, are not within the exclusive domain of the copyright owner; some are in the
public domain. Any individual may reproduce a copyrighted work for a "fair use"; the copyright owner does not
possess the exclusive right to such a use. Compare § 106 with § 107.
"Anyone who violates any of the exclusive rights of the copyright owner," that is, anyone who trespasses into his
exclusive domain by using or authorizing the use of the copyrighted work in one of the five ways set forth in the
statute, "is an infringer of the copyright." § 501(a). Conversely, anyone who is authorized by the copyright owner to
use the copyrighted work in a way specified in the statute or who makes a fair use of the work is not an infringer of
the copyright with respect to such use.
The Copyright Act provides the owner of a copyright with a potent arsenal of remedies against an infringer of his
work, including an injunction to restrain the infringer from violating his rights, the impoundment and destruction of
all reproductions of his work made in violation of his rights, a recovery of his actual damages and any additional
profits realized by the infringer or a recovery of statutory damages, and attorney's fees. §§ 502-505.
The two respondents in this case do not seek relief against the Betamax users who have allegedly infringed their
copyrights. Moreover, this is not a class action on behalf of all copyright owners who license their works for
television broadcast, and respondents have no right to invoke whatever rights other copyright holders may have to
bring infringement actions based on Betamax copying of their works. As was made clear by their own evidence, the
copying of the respondents' programs represents a small portion of the total use of VTR's. It is, however, the taping
of respondents' own copyrighted programs that provides them with standing to charge Sony with contributory
infringement. To prevail, they have the burden of proving that users of the Betamax have infringed their copyrights,
and that Sony should be held responsible for that infringement.
III
The Copyright Act does not expressly render anyone liable for infringement committed by another. In contrast, the
Patent Act expressly brands anyone who "actively induces infringement of a patent" as an infringer, 35 U.S.C. §
271(b), and further imposes liability on certain individuals labeled "contributory" infringers, § 271(c). The absence of
such express language in the copyright statute does not preclude the imposition of liability for copyright
infringements on certain parties who have not themselves engaged in the infringing activity. For vicarious liability is
imposed in virtually all areas of the law, and the concept of contributory infringement is merely a species of the
broader problem of identifying the circumstances in which it is just to hold one individual accountable for the actions
of another.
Such circumstances were plainly present in Kalem Co. v. Harper Brothers, 222 U. S. 55 (1911), the copyright
decision of this Court on which respondents place their principal reliance. In Kalem, the Court held that the producer
of an unauthorized film dramatization of the copyrighted book Ben Hur was liable for his sale of the motion picture
to jobbers, who in turn arranged for the commercial exhibition of the film. Justice Holmes, writing for the Court,
explained:
"The defendant not only expected but invoked by advertisement the use of its films for dramatic reproduction of the
story. That was the most conspicuous purpose for which they could be used, and the one for which especially they
were made. If the defendant did not contribute to the infringement it is impossible to do so except by taking part in
the final act. It is liable on principles recognized in every part of the law."
The use for which the item sold in Kalem had been "especially" made was, of course, to display the performance
that had already been recorded upon it. The producer had personally appropriated the copyright owner's protected
work and, as the owner of the tangible medium of expression upon which the protected work was recorded,
authorized that use by his sale of the film to jobbers. But that use of the film was not his to authorize: the copyright
owner possessed the exclusive right to authorize public performances of his work. Further, the producer personally
advertised the unauthorized public performances, dispelling any possible doubt as to the use of the film which he
had authorized.
Respondents argue that Kalem stands for the proposition that supplying the "means" to accomplish an infringing
activity and encouraging that activity through advertisement are sufficient to establish liability for copyright
infringement. This argument rests on a gross generalization that cannot withstand scrutiny. The producer in Kalem
did not merely provide the "means" to accomplish an infringing activity; the producer supplied the work itself, albeit
in a new medium of expression. Sony in the instant case does not supply Betamax consumers with respondents'
works; respondents do. Sony supplies a piece of equipment that is generally capable of copying the entire range of
programs that may be televised: those that are uncopyrighted, those that are copyrighted but may be copied
without objection from the copyright holder, and those that the copyright holder would prefer not to have copied.
The Betamax can be used to make authorized or unauthorized uses of copyrighted works, but the range of its
potential use is much broader than the particular infringing use of the film Ben Hur involved in Kalem. Kalem does
not support respondents' novel theory of liability.
Justice Holmes stated that the producer had "contributed" to the infringement of the copyright, and the label
"contributory infringement" has been applied in a number of lower court copyright cases involving an ongoing
relationship between the direct infringer and the contributory infringer at the time the infringing conduct occurred.
In such cases, as in other situations in which the imposition of vicarious liability is manifestly just, the "contributory"
infringer was in a position to control the use of copyrighted works by others, and had authorized the use without
permission from the copyright owner. This case, however, plainly does not fall in that category. The only contact
between Sony and the users of the Betamax that is disclosed by this record occurred at the moment of sale. The
District Court expressly found that "no employee of Sony, Sonam or DDBI had either direct involvement with the
allegedly infringing activity or direct contact with purchasers of Betamax who recorded copyrighted works off the
air." "there was no evidence that any of the copies made by Griffiths or the other individual witnesses in this suit
were influenced or encouraged by [Sony's] advertisements."
If vicarious liability is to be imposed on Sony in this case, it must rest on the fact that it has sold equipment with
constructive knowledge of the fact that its customers may use that equipment to make unauthorized copies of
copyrighted material. There is no precedent in the law of copyright for the imposition of vicarious liability on such a
theory. The closest analogy is provided by the patent law cases to which it is appropriate to refer because of the
historic kinship between patent law and copyright law.
In the Patent Act, both the concept of infringement and the concept of contributory infringement are expressly
defined by statute. The prohibition against contributory infringement is confined to the knowing sale of a component
especially made for use in connection with a particular patent. There is no suggestion in the statute that one
patentee may object to the sale of a product that might be used in connection with other patents. Moreover, the Act
expressly provides that the sale of a "staple article or commodity of commerce suitable for substantial noninfringing
use" is not contributory infringement. 35 U.S.C. § 271(c).
When a charge of contributory infringement is predicated entirely on the sale of an article of commerce that is used
by the purchaser to infringe a patent, the public interest in access to that article of commerce is necessarily
implicated. A finding of contributory infringement does not, of course, remove the article from the market
altogether; it does, however, give the patentee effective control over the sale of that item. Indeed, a finding of
contributory infringement is normally the functional equivalent of holding that the disputed article is within the
monopoly granted to the patentee.
For that reason, in contributory infringement cases arising under the patent laws, the Court has always recognized
the critical importance of not allowing the patentee to extend his monopoly beyond the limits of his specific grant.
These cases deny the patentee any right to control the distribution of unpatented articles unless they are "unsuited
for any commercial noninfringing use." Dawson Chemical Co. v. Rohm & Hass Co., 448 U. S. 176, 448 U. S. 198
(1980). Unless a commodity "has no use except through practice of the patented method," id. at 448 U. S. 199, the
patentee has no right to claim that its distribution constitutes contributory infringement. "To form the basis for
contributory infringement, the item must almost be uniquely suited as a component of the patented invention." P.
Rosenberg, Patent Law Fundamentals § 17.02[2] (2d ed.1982).
"[A] sale of an article which though adapted to an infringing use is also adapted to other and lawful uses, is not
enough to make the seller a contributory infringer. Such a rule would block the wheels of commerce."
Henry v. A. B. Dick Co., 224 U. S. 1, 224 U. S. 48 (1912), overruled on other grounds, Motion Picture Patents Co. v.
Universal Film Mfg. Co., 243 U. S. 502, 243 U. S. 517 (1917).
We recognize there are substantial differences between the patent and copyright laws. But in both areas, the
contributory infringement doctrine is grounded on the recognition that adequate protection of a monopoly may
require the courts to look beyond actual duplication of a device or publication to the products or activities that make
such duplication possible. The staple article of commerce doctrine must strike a balance between a copyright
holder's legitimate demand for effective -- not merely symbolic -- protection of the statutory monopoly, and the
rights of others freely to engage in substantially unrelated areas of commerce. Accordingly, the sale of copying
equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is
widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing
uses.
IV
The question is thus whether the Betamax is capable of commercially significant noninfringing uses. In order to
resolve that question, we need not explore all the different potential uses of the machine and determine whether or
not they would constitute infringement. Rather, we need only consider whether, on the basis of the facts as found
by the District Court, a significant number of them would be noninfringing. Moreover, in order to resolve this case,
we need not give precise content to the question of how much use is commercially significant. For one potential use
of the Betamax plainly satisfies this standard, however it is understood: private, noncommercial time-shifting in the
home. It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it
for their programs, and (B) because the District Court's factual findings reveal that even the unauthorized home
time-shifting of respondents' programs is legitimate fair use.
A. Authorized Time-Shifting
Each of the respondents owns a large inventory of valuable copyrights, but, in the total spectrum of television
programming, their combined market share is small. The exact percentage is not specified, but it is well below 10%.
If they were to prevail, the outcome of this litigation would have a significant impact on both the producers and the
viewers of the remaining 90% of the programming in the Nation. No doubt, many other producers share
respondents' concern about the possible consequences of unrestricted copying. Nevertheless, the findings of the
District Court make it clear that time-shifting may enlarge the total viewing audience, and that many producers are
willing to allow private time-shifting to continue, at least for an experimental time period.
The District Court found:
"Even if it were deemed that home-use recording of copyrighted material constituted infringement, the Betamax
could still legally be used to record noncopyrighted material or material whose owners consented to the copying. An
injunction would deprive the public of the ability to use the Betamax for this noninfringing off-the-air recording. "
"Defendants introduced considerable testimony at trial about the potential for such copying of sports, religious,
educational and other programming. This included testimony from representatives of the Offices of the
Commissioners of the National Football, Basketball, Baseball and Hockey Leagues and Associations, the Executive
Director of National Religious Broadcasters, and various educational communications agencies. Plaintiffs attack the
weight of the testimony offered, and also contend that an injunction is warranted because infringing uses outweigh
noninfringing uses."
"Whatever the future percentage of legal versus illegal home-use recording might be, an injunction which seeks to
deprive the public of the very tool or article of commerce capable of some noninfringing use would be an extremely
harsh remedy, as well as one unprecedented in copyright law."
Although the District Court made these statements in the context of considering the propriety of injunctive relief, the
statements constitute a finding that the evidence concerning "sports, religious, educational and other programming"
was sufficient to establish a significant quantity of broadcasting whose copying is now authorized, and a significant
potential for future authorized copying. That finding is amply supported by the record. In addition to the religious
and sports officials identified explicitly by the District Court, two items in the record deserve specific mention.
First is the testimony of John Kenaston, the station manager of Channel 58, an educational station in Los Angeles
affiliated with the Public Broadcasting Service. He explained and authenticated the station's published guide to its
programs. For each program, the guide tells whether unlimited home taping is authorized, home taping is authorized
subject to certain restrictions (such as erasure within seven days), or home taping is not authorized at all. The
Spring, 1978, edition of the guide described 107 programs. Sixty-two of those programs or 58% authorize some
home taping. Twenty-one of them, or almost 20%, authorize unrestricted home taping.
Second is the testimony of Fred Rogers, president of the corporation that produces and owns the copyright on Mister
Rogers' Neighborhood. The program is carried by more public television stations than any other program. Its
audience numbers over 3,000,000 families a day. He testified that he had absolutely no objection to home taping for
noncommercial use, and expressed the opinion that it is a real service to families to be able to record children's
programs and to show them at appropriate times.
If there are millions of owners of VTR's who make copies of televised sports events, religious broadcasts, and
educational programs such as Mister Rogers' Neighborhood, and if the proprietors of those programs welcome the
practice, the business of supplying the equipment that makes such copying feasible should not be stifled simply
because the equipment is used by some individuals to make unauthorized reproductions of respondents' works. The
respondents do not represent a class composed of all copyright holders. Yet a finding of contributory infringement
would inevitably frustrate the interests of broadcasters in reaching the portion of their audience that is available only
through time-shifting.
Of course, the fact that other copyright holders may welcome the practice of time-shifting does not mean that
respondents should be deemed to have granted a license to copy their programs. Third-party conduct would be
wholly irrelevant in an action for direct infringement of respondents' copyrights. But in an action for contributory
infringement against the seller of copying equipment, the copyright holder may not prevail unless the relief that he
seeks affects only his programs, or unless he speaks for virtually all copyright holders with an interest in the
outcome. In this case, the record makes it perfectly clear that there are many important producers of national and
local television programs who find nothing objectionable about the enlargement in the size of the television audience
that results from the practice of time-shifting for private home use. The seller of the equipment that expands those
producers' audiences cannot be a contributory infringer if, as is true in this case, it has had no direct involvement
with any infringing activity.
B. Unauthorized Time-Shifting
Even unauthorized uses of a copyrighted work are not necessarily infringing. An unlicensed use of the copyright is
not an infringement unless it conflicts with one of the specific exclusive rights conferred by the copyright statute.
Twentieth Century Music Corp. v. Aiken, 422 U.S. at 422 U. S. 154-155. Moreover, the definition of exclusive rights
in § 106 of the present Act is prefaced by the words "subject to sections 107 through 118." Those sections describe
a variety of uses of copyrighted material that "are not infringements of copyright" "notwithstanding the provisions of
section 106." The most pertinent in this case is § 107, the legislative endorsement of the doctrine of "fair use."
That section identifies various factors that enable a court to apply an "equitable rule of reason" analysis to particular
claims of infringement. Although not conclusive, the first factor requires that "the commercial or nonprofit character
of an activity" be weighed in any fair use decision. If the Betamax were used to make copies for a commercial or
profitmaking purpose, such use would presumptively be unfair. The contrary presumption is appropriate here,
however, because the District Court's findings plainly establish that time-shifting for private home use must be
characterized as a noncommercial, nonprofit activity. Moreover, when one considers the nature of a televised
copyrighted audiovisual work, see 17 U.S.C. § 107(2) (1982 ed.), and that time-shifting merely enables a viewer to
see such a work which he had been invited to witness in its entirety free of charge, the fact that the entire work is
reproduced, see § 107(3), does not have its ordinary effect of militating against a finding of fair use.
This is not, however, the end of the inquiry, because Congress has also directed us to consider "the effect of the use
upon the potential market for or value of the copyrighted work." § 107(4). The purpose of copyright is to create
incentives for creative effort. Even copying for noncommercial purposes may impair the copyright holder's ability to
obtain the rewards that Congress intended him to have. But a use that has no demonstrable effect upon the
potential market for, or the value of, the copyrighted work need not be prohibited in order to protect the author's
incentive to create. The prohibition of such noncommercial uses would merely inhibit access to ideas without any
countervailing benefit.
Thus, although every commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly
privilege that belongs to the owner of the copyright, noncommercial uses are a different matter. A challenge to a
noncommercial use of a copyrighted work requires proof either that the particular use is harmful or that, if it should
become widespread, it would adversely affect the potential market for the copyrighted work. Actual present harm
need not be shown; such a requirement would leave the copyright holder with no defense against predictable
damage. Nor is it necessary to show with certainty that future harm will result. What is necessary is a showing by a
preponderance of the evidence that some meaningful likelihood of future harm exists. If the intended use is for
commercial gain, that likelihood may be presumed. But if it is for a noncommercial purpose, the likelihood must be
demonstrated.
In this case, respondents failed to carry their burden with regard to home time-shifting. The District Court described
respondents' evidence as follows:
"Plaintiffs' experts admitted at several points in the trial that the time-shifting without librarying would result in 'not a
great deal of harm.' Plaintiffs' greatest concern about time-shifting is with 'a point of important philosophy that
transcends even commercial judgment.' They fear that, with any Betamax usage, 'invisible boundaries' are passed:
'the copyright owner has lost control over his program.'"
Later in its opinion, the District Court observed:
"Most of plaintiffs' predictions of harm hinge on speculation about audience viewing patterns and ratings, a
measurement system which Sidney Sheinberg, MCA's president, calls a 'black art' because of the significant level of
imprecision involved in the calculations."
There was no need for the District Court to say much about past harm. "Plaintiffs have admitted that no actual harm
to their copyrights has occurred to date." Id. at 451.
On the question of potential future harm from time-shifting, the District Court offered a more detailed analysis of the
evidence. It rejected respondents' "fear that persons 'watching' the original telecast of a program will not be
measured in the live audience, and the ratings and revenues will decrease" by observing that current measurement
technology allows the Betamax audience to be reflected. Id. at 466. It rejected respondents' prediction "that live
television or movie audiences will decrease as more people watch Betamax tapes as an alternative," with the
observation that "[t]here is no factual basis for [the underlying] assumption." Ibid. It rejected respondents' "fear
that time-shifting will reduce audiences for telecast reruns," and concluded instead that "given current market
practices, this should aid plaintiffs, rather than harm them." Ibid. And it declared that respondents' suggestion that
"theater or film rental exhibition of a program will suffer because of time-shift recording of that program" "lacks
merit." Id. at 467.
After completing that review, the District Court restated its overall conclusion several times, in several different
ways. "Harm from time-shifting is speculative and, at best, minimal." Ibid.
"The audience benefits from the time-shifting capability have already been discussed. It is not implausible that
benefits could also accrue to plaintiffs, broadcasters, and advertisers, as the Betamax makes it possible for more
persons to view their broadcasts." Ibid. "No likelihood of harm was shown at trial, and plaintiffs admitted that there
had been no actual harm to date." Id. at 468-469.
"Testimony at trial suggested that Betamax may require adjustments in marketing strategy, but it did not establish
even a likelihood of harm."
"Television production by plaintiffs today is more profitable than it has ever been, and, in five weeks of trial, there
was no concrete evidence to suggest that the Betamax will change the studios' financial picture."
The District Court's conclusions are buttressed by the fact that to the extent time-shifting expands public access to
freely broadcast television programs, it yields societal benefits. In Community Television of Southern California v.
Gottfried, 459 U. S. 498, 459 U. S. 508, n. 12 (1983), we acknowledged the public interest in making television
broadcasting more available. Concededly, that interest is not unlimited. But it supports an interpretation of the
concept of "fair use" that requires the copyright holder to demonstrate some likelihood of harm before he may
condemn a private act of time-shifting as a violation of federal law.
When these factors are all weighed in the "equitable rule of reason" balance, we must conclude that this record
amply supports the District Court's conclusion that home time-shifting is fair use. In light of the findings of the
District Court regarding the state of the empirical data, it is clear that the Court of Appeals erred in holding that the
statute as presently written bars such conduct.
In summary, the record and findings of the District Court lead us to two conclusions. First, Sony demonstrated a
significant likelihood that substantial numbers of copyright holders who license their works for broadcast on free
television would not object to having their broadcasts time-shifted by private viewers. And second, respondents
failed to demonstrate that time-shifting would cause any likelihood of nonminimal harm to the potential market for,
or the value of, their copyrighted works. The Betamax is, therefore, capable of substantial noninfringing uses. Sony's
sale of such equipment to the general public does not constitute contributory infringement of respondents'
copyrights.
V
"The direction of Art. I is that Congress shall have the power to promote the progress of science and the useful arts.
When, as here, the Constitution is permissive, the sign of how far Congress has chosen to go can come only from
Congress." Deepsouth Packing Co. v. Laitram Corp., 406 U. S. 518, 406 U. S. 530 (1972).
One may search the Copyright Act in vain for any sign that the elected representatives of the millions of people who
watch television every day have made it unlawful to copy a program for later viewing at home, or have enacted a
flat prohibition against the sale of machines that make such copying possible.
It may well be that Congress will take a fresh look at this new technology, just as it so often has examined other
innovations in the past. But it is not our job to apply laws that have not yet been written. Applying the copyright
statute, as it now reads, to the facts as they have been developed in this case, the judgment of the Court of Appeals
must be reversed.
It is so ordered.
——o0o——
ELSMERE MUSIC, INC., Plaintiff, against NATIONAL BROADCASTING COMPANY, INC., Defendant.
UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK
482 F. Supp. 741
January 9, 1980
GOETTEL, District Judge
In the dark days of 1977, when the City of New York teetered on the brink of bankruptcy and its name had become
synonymous with sin, there came forth upon the land a message of hope. On the television screens of America there
appeared the image of a top-hatted Broadway showgirl, backed by an advancing phalanx of dancers, chanting:
“I-I-I-I-I-I Love New Yo-o-o-o-o-o-rk!"
Repeated again and again (to musical accompaniment), with increasing intensity throughout the commercial, this
slogan was to become the theme for an extensive series of advertisements that were to bring the nation assurances
from the stars of Broadway, ranging from Dracula to the Cowardly Lion, that all was well, and that they too Loved
New York.
As an ad campaign for an ailing city, it was an unparalleled Success. Crucial to the campaign was the brief but
exhilarating musical theme written by Steve Karmen who had previously authored a number of highly successful
commercial jingles, including "You Can Take Salem Out of the Country" and "Weekends Were Made for Michelob."
While the "I Love New York" song was written for the New York State Department of Commerce, its initial use and
identity focused on New York City.
The success of this campaign did not go unnoticed in the entertainment world. On May 20, 1978, the popular weekly
variety program "Saturday Night Live" ("SNL") performed a comedy sketch over defendant National Broadcasting
Company's network, In this sketch the cast of SNL, portraying the mayor and the members of the Chamber of
Commerce of the biblical city of Sodom, are seen discussing Sodom's poor public image with out of towners, and the
effect this was having on the tourist trade. In an attempt to recast the City's image in a more positive light, a new
advertising campaign emphasizing the less sensational aspects of Sodom nightlife is unveiled. As the highlight of this
campaign the song "I Love Sodom" is sung A cappella by a chorus line of three SNL regulars to the tune of "I Love
New York," with the words "I Love Sodom" repeated three times.
The plaintiff, Elsmere Music, Inc., the copyright proprietor of "I Love New York," did not see the humor of the
sketch. It sued for copyright infringement.
The defendant admits that its sketch and song were intended to resemble the original "I Love New York" advertising
campaign and jingle. It claims, however, that the use made of the plaintiff's melody was no more than was
necessary to create an effective parody, and that as such was, at worst, a De minimis infringement. Alternatively,
the defendant asserts that, even if the infringement was more than De minimis, it still did not constitute an
actionable copyright violation since such use was permitted as a fair use under section 101 of the 1976 Copyright
Act, 17 U.S.C. § 107.
The plaintiff contests these assertions. It contends that the use made was not De minimis, and in fact was far more
extensive than was necessary to conjure up the original. In addition, it claims that the singing of "I Love Sodom" did
not constitute a fair use since it was part of a sketch that parodied New York City and the problems it was having,
rather than one parodying New York State, its advertising campaign, or the song "I Love New York" itself.
In its entirety, the original song "I Love New York" is composed of a 45 word lyric and 100 measures. Of this only
four notes, D C D E (in that sequence), and the words "I Love" were taken and used in the SNL sketch (although
they were repeated 3 or 4 times). As a result, the defendant now argues that the use it made was insufficient to
constitute copyright infringement.
This Court does not agree. Although it is clear that, on its face, the taking involved in this action is relatively slight,
on closer examination it becomes apparent that this portion of the piece, the musical phrase that the lyrics "I Love
New York" accompany, is the heart of the composition. Use of such a significant (albeit less than extensive) portion
of the composition is far more than merely a De minirnis taking.
Having so determined, the Court must next address the question of whether the defendant's copying of the plaintiff's
jingle constituted a fair use which would exempt it from liability the Copyright Act. Fair use has been defined as "a
privilege in others than the owner of the copyright to use the copyrighted material in a reasonable manner without
his consent, notwithstanding the monopoly granted to the owner of the copyright. " The determination of whether a
use constitutes a fair use or is a copyright infringement requires all examination of the facts in each case. To assist
in making this determination, section 101 of the 1976 Copyright Act, 17 U.S.C. § 107, sets forth several criteria to be
considered: "(1) the purpose and character of the use . . . ; (2) the nature of the copyrighted work; (3) the amount
and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use
upon the potential market for or value of the copyrighted work."
The defendant asserts that the purpose and nature of its copying of "I Love New York" was parody, and that its
copying was thus a fair use of the song. It has been held that an author is entitled to more extensive use of
another's copyrighted work in creating a parody than in creating other fictional or dramatic works.
In the leading case of Berlin v. E. C. Publications, Inc., 329 F.2d 541 (2d Cir. 1964), the Court was faced with
deciding whether certain parody lyrics printed in Mad Magazine, intended to comment humorously upon the "idiotic"
world of that time, and designed to be sung to the tunes of various popular songs, infringed upon the copyrights of
those songs. Noting that "as a general proposition. . . . parody and satire Are deserving of substantial freedom," the
court held that, as the defendants had taken no more of the original songs than was necessary to "recall or "conjure
up' the object of his satire," and as the parody had "neither the intent nor the effect of fulfilling the demand for the
original," no infringement had taken place.
The song "I Love Sodom," as well as the sketch of which it was a part, was clearly an attempt by the writers and
cast of SNL to satirize the way in which New York City has attempted to improve its somewhat tarnished image
through the use of a slick advertising campaign. As such, the defendant's copying of the song "I Love New York"
seems to come within the definition of parody. The plaintiff, however, contends that, while the sketch may have
parodied New York City and its problems, it had nothing to do with, and did not parody, either New York State and
its "I Love New York" advertising campaign or the song "I Love New York" itself. As a result, the plaintiff asserts that
the copying of its song constituted an infringement upon it and not a fair use.
In MCA, Inc. v. Wilson, supra, the court was presented with the question of whether the song "Cunnilingus
Champion of Company C" as used in the play "Let My People Come A Sexual Musical" infringed upon the copyright of
the song "Boogie Woogie Bugle Boy of Company B." Finding that the defendant's song, although it "may have
sought to parody life, or more particularly sexual mores and taboos," did not attempt to parody or "comment
ludicrously upon Bugle Boy" itself, the Court held that there had been no fair use and that as a result the plaintiff's
copyright had been infringed. Id. at 453-54. Similarly, in Walt Disney Productions v. Mature Pictures Corp., supra,
389 F. Stipp. at 1398, the court held that, while the defendants may have been seeking in their display of bestiality
to parody life, they did not parody the Mickey Mouse March but sought only to improperly use the copyrighted
material. In neither of these cases did the infringed upon musical piece relate, in any respect, to the Subject that
was being parodied.
The plaintiff asserts that, as the defendants did not attempt to parody the song "I Love New York" itself, the singing
of "I Love Sodom" did not, under MCA or Walt Disney, constitute a fair use. We cannot agree. The song "I Love
Sodom" in the sketch was intended to symbolize a catchy, upbeat tune that would divert a potential tourist's
attention from the town's reputation for gambling, gluttony, idol worshipping, and, Of Course,, sodomy. The song
was as much a parody of the song "I Love New York," a catchy, upbeat tune intended to alter a potential tourist's
perceptions of New York as it was of the overall "I Love New York" advertising campaign.
Having found that the SNL sketch and song validly parodied the plaintiff's jingle and the "I Love New York"
advertising campaign in general, the Court next turns to the important question of whether such use has tended to
interfere with the marketability of the copyrighted work. In this regard, it is clear to the Court that the defendant's
playing of the song "I Love Sodom" has not so interfered. The song has not affected the value of the copyrighted
work. Neither has it had nor could it have the "effect of fulfilling the demand for the original." Just as imitation may
be the sincerest form of flattery, parody is an acknowledgment of the importance of the thing parodied. In short, the
defendant's version of the jingle has not in the least competed with or detracted from plaintiff's work.
We turn finally to the extent of the use. The plaintiff argues that, as a result of the multiple repetition of the phrase
"I Love Sodom" at the end of the SNL sketch, the defendant has appropriated more of the plaintiff's work than was
necessary to "conjure up" the original. The Court does not agree. In the "I Love New York" television
advertisements, and particularly in the "show tour" commercials, which relate specifically to the city, the phrase "I
Love New York" is repeated to musical accompaniment continuously throughout. Thus, while a single recital of "I
Love Sodom" might have alerted a viewer of the sketch as to the target of the parody, the repetition of the phrase
served not only to insure that its viewers were so alerted, but also to parody the form of these frequently broadcast
advertisements themselves. As a result, the repetition furthered the overall satirical effect. In addition, the Court
believes that the repetition of the phrase, Sung A cappella and lasting for only eighteen seconds, cannot be said to
be clearly more than was necessary to "conjure up" the original. Nor was it so substantial a taking as to preclude
this use from being a fair one.
Basing its decision on undisputed facts presented by the parties, as well as on a videotaped viewing of the television
sketch containing the alleged infringement, the Court finds that the defendant's use of the plaintiff's jingle in the SNL
sketch was a fair use, and that as a result no copyright violation occurred. Accordingly, the plaintiff's motion for
summary judgment is denied, and the defendant's motion for surname judgment is granted. Tills action is hereby
dismissed.
——o0o——
U.S. Supreme Court
Mazer v. Stein, 347 U.S. 201 (1954)
Argued December 3, 1953
Decided March 8, 1954
347 U.S. 201
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
Syllabus
Respondents are engaged in the manufacture and sale of electric lamps. One of the respondents created original
works of sculpture, from the models of which china statuettes were made. The statuettes were used as bases for
fully equipped electric lamps, which respondents sold. Respondents submitted the statuettes, without any lamp
components added, for registration under the copyright law as "works of art" or reproductions thereof.
Held: the statuettes were copyrightable.
(a) The successive Copyright Acts, the legislative history of the 1909 Act, and the practice of the Copyright Office
show that "works of art" and "reproductions of works of art" were intended by Congress to include the authority to
copyright such statuettes.
(b) That the statuettes, fitted as lamps or unfitted, may be patentable does not bar their copyright as works of art.
(c) The intended or actual use in industry of an article eligible for copyright does not bar or invalidate its registration.
(d) The subsequent registration of a work of art published as an element in a manufactured article is not a misuse of
the copyright.
Respondents sued petitioners for copyright infringement, and the District Court dismissed the complaint. 111 F.
Supp. 359. The Court of Appeals reversed. 204 F.2d 472. This Court granted certiorari. 346 U.S. 811. Affirmed.
MR. JUSTICE REED delivered the opinion of the Court.
This case involves the validity of copyrights obtained by respondents for statuettes of male and female dancing
figures made of semivitreous china. The controversy centers around the fact that, although copyrighted as "works of
art," the statuettes were intended for use and used as bases for table lamps, with electric wiring, sockets, and lamp
shades attached.
Respondents are partners in the manufacture and sale of electric lamps. One of the respondents created original
works of sculpture in the form of human figures by traditional clay-model technique. From this model, a production
mold for casting copies was made. The resulting statuettes, without any lamp components added, were submitted
by the respondents to the Copyright Office for registration as "works of art" or reproductions thereof under § 5(g) or
§ 5(h) of the copyright law, and certificates of registration issued. Sales (publication in accordance with the statute)
as fully equipped lamps preceded the applications for copyright registration of the statuettes. 17 U.S.C. (Supp. V,
1952) §§ 10, 11, 13, 209; Rules and Regulations, 37 CFR, 1949, §§ 202.8 and 202.9. Thereafter, the statuettes were
sold in quantity throughout the country both as lamp bases and as statuettes. The sales in lamp form accounted for
all but an insignificant portion of respondents' sales.
Petitioners are partners, and, like respondents, make and sell lamps. Without authorization, they copied the
statuettes, embodied them in lamps, and sold them.
The instant case is one in a series of reported suits brought by respondents against various alleged infringers of the
copyrights, all presenting the same or a similar question. Because of conflicting decisions, we granted certiorari. 346
U.S. 811. In the present case, respondents sued petitioners for infringement in Maryland. Stein v. Mazer, 111 F.
Supp. 359. Following the Expert decision and rejecting the reasoning of the District Court in the Rosenthal opinion,
both referred to in the preceding note, the District Court dismissed the complaint. The Court of Appeals reversed,
and held the copyrights valid. Stein v. Mazer, 204 F.2d 472. It said:
"A subsequent utilization of a work of art in an article of manufacture in no way affects the right of the copyright
owner to be protected against infringement of the work of art itself."
Petitioners, charged by the present complaint with infringement of respondents' copyrights of reproductions of their
works of art, seek here a reversal of the Court of Appeals decree upholding the copyrights. Petitioners, in their
petition for certiorari, present a single question:
"Can statuettes be protected in the United States by copyright when the copyright applicant intended primarily to
use the statuettes in the form of lamp bases to be made and sold in quantity and carried the intentions into effect?"
"Stripped down to its essentials, the question presented is: can a lamp manufacturer copyright his lamp bases?"
The first paragraph accurately summarizes the issue. The last gives it a quirk that unjustifiably, we think, broadens
the controversy. The case requires an answer not as to a manufacturer's right to register a lamp base, but as to an
artist's right to copyright a work of art intended to be reproduced for lamp bases. As petitioners say in their brief,
their contention "questions the validity of the copyright based upon the actions of respondents." Petitioners question
the validity of a copyright of a work of art for "mass" production. "Reproduction of a work of art" does not mean to
them unlimited reproduction. Their position is that a copyright does not cover industrial reproduction of the
protected article. Thus, their reply brief states:
"When an artist becomes a manufacturer or a designer for a manufacturer, he is subject to the limitations of design
patents, and deserves no more consideration than any other manufacturer or designer."
It is not the right to copyright an article that could have utility under § 5(g) and (h), note 1 supra, that petitioners
oppose. Their brief accepts the copyrightability of the great carved golden salt cellar of Cellini, but adds:
"If, however, Cellini designed and manufactured this item in quantity so that the general public could have salt
cellars, then an entirely different conclusion would be reached. In such case, the salt cellar becomes an article of
manufacture having utility in addition to its ornamental value, and would therefore have to be protected by design
patent. "
It is publication as a lamp and registration as a statue to gain a monopoly in manufacture that they assert is such a
misuse of copyright as to make the registration invalid.
No unfair competition question is presented. The constitutional power of Congress to confer copyright protection on
works of art or their reproductions is not questioned. Petitioners assume, as Congress has in its enactments and, as
do we, that the constitutional clause empowering legislation
"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the
exclusive Right to their respective Writings and Discoveries,"
Art. I, § 8, cl. 8, includes within the term "Authors" the creator of a picture or a statue. The Court's consideration will
be limited to the question presented by the petition for the writ of certiorari. In recent years, the question as to
utilitarian use of copyrighted articles has been much discussed.
In answering that issue, a review of the development of copyright coverage will make clear the purpose of the
Congress in its copyright legislation. In 1790 the First Congress conferred a copyright on "authors of any map, chart,
book or books already printed." Later, designing, engraving and etching were included; in 1831, musical
composition; dramatic compositions in 1856; and photographs and negatives thereof in 1865.
The Act of 1870 defined copyrightable subject matter as:
". . . any book, map, chart, dramatic or musical composition, engraving, cut, print, or photograph or negative
thereof, or of a painting, drawing, chromo, statute, statuary, and of models or designs intended to be perfected as
works of the fine arts."
(Emphasis supplied.) The italicized part added three-dimensional work of art to what had been protected previously.
In 1909, Congress again enlarged the scope of the copyright statute. The new Act provided in § 4:
"That the works for which copyright may be secured under this Act shall include all the writings of an author. "
Some writers interpret this section as being coextensive with the constitutional grant, but the House Report, while
inconclusive, indicates that it was "declaratory of existing law" only. Section 5 relating to classes of writings in 1909
read as shown in the margin with subsequent additions not material to this decision.
Significant for our purposes was the deletion of the fine arts clause of the 1870 Act. Verbal distinctions between
purely aesthetic articles and useful works of art ended insofar as the statutory copyright language is concerned.
The practice of the Copyright Office, under the 1870 and 1874 Acts and before the 1909 Act, was to allow
registration "as works of the fine arts" of articles of the same character as those of respondents now under
challenge. Seven examples appear in the Government's brief amicus curiae. In 1910, interpreting the 1909 Act, the
pertinent Copyright Regulations read as shown in the margin. Because, as explained by the Government, this
regulation "made no reference to articles which might fairly be considered works of art although they might also
serve a useful purpose," it was reworded in 1917 as shown below. The amicus brief gives sixty examples selected at
five-year intervals, 1912-1952, said to be typical of registrations of works of art possessing utilitarian aspects. The
current pertinent regulation, published in 37 CFR, 1949, § 202.8, reads thus:
"Works of art (Class G) -- (a) In General. This class includes works of artistic craftsmanship, in so far as their form
but not their mechanical or utilitarian aspects are concerned, such as artistic jewelry, enamels, glassware, and
tapestries, as well as all works belonging to the fine arts, such as paintings, drawings and sculpture. . . ."
So we have a contemporaneous and long continued construction of the statutes by the agency charged to
administer them that would allow the registration of such a statuette as is in question here.
This Court once essayed to fix the limits of the fine arts. That effort need not be appraised in relation to this
copyright issue. It is clear Congress intended the scope of the copyright statute to include more than the traditional
fine arts. Herbert Putnam, Esq., then Librarian of Congress and active in the movement to amend the copyright
laws, told the joint meeting of the House and Senate Committees:
"The term 'works of art' is deliberately intended as a broader specification than 'works of the fine arts' in the present
statute with the idea that there is subject matter (for instance, of applied design, not yet within the province of
design patents), which may properly be entitled to protection under the copyright law. "
The successive acts, the legislative history of the 1909 Act and the practice of the Copyright Office unite to show
that "works of art" and "reproductions of works of art" are terms that were intended by Congress to include the
authority to copyright these statuettes. Individual perception of the beautiful is too varied a power to permit a
narrow or rigid concept of art. As a standard, we can hardly do better than the words of the present Regulation, §
202.8, supra, naming the things that appertain to the arts. They must be original, that is, the author's tangible
expression of his ideas. Compare Burrow-Giles Lithographic Co. v. Sarony, 111 U. S. 53, 111 U. S. 59-60. Such
expression, whether meticulously delineating the model or mental image or conveying the meaning by modernistic
form or color, is copyrightable. What cases there are confirm this coverage of the statute.
The conclusion that the statues here in issue may be copyrighted goes far to solve the question whether their
intended reproduction as lamp stands bars or invalidates their registration. This depends solely on statutory
interpretation. Congress may, after publication, protect by copyright any writing of an author. Its statute creates the
copyright. It did not exist at common law even though he had a property right in his unpublished work.
But petitioners assert that congressional enactment of the design patent laws should be interpreted as denying
protection to artistic articles embodied or reproduced in manufactured articles. They say:
"Fundamentally and historically, the Copyright Office is the repository of what each claimant considers to be a
cultural treasure, whereas the Patent Office is the repository of what each applicant considers to be evidence of the
advance in industrial and technological fields."
Their argument is that design patents require the critical examination given patents to protect the public against
monopoly. Attention is called to Gorham Mfg. Co. v. White, 14 Wall. 511, interpreting the design patent law of 1842,
5 Stat. 544, granting a patent to anyone who by "their own industry, genius, efforts, and expense, may have
invented or produced any new and original design for a manufacture. . . ." A pattern for flat silver was there upheld.
The intermediate and present law differs little. "Whoever invents any new, original and ornamental design for an
article of manufacture may obtain a patent therefor, . . . " subject generally to the provisions concerning patents for
invention. § 171, 66 Stat. 805. As petitioner sees the effect of the design patent law:
"If an industrial designer can not satisfy the novelty requirements of the design patent laws, then his design as used
on articles of manufacture can be copied by anyone."
Petitioner has furnished the Court a booklet of numerous design patents for statuettes, bases for table lamps and
similar articles for manufacture, quite indistinguishable in type from the copyrighted statuettes here in issue.
Petitioner urges that overlapping of patent and copyright legislation so as to give an author or inventor a choice
between patents and copyrights should not be permitted. We assume petitioner takes the position that protection for
a statuette for industrial use can only be obtained by patent, if any protection can be given.
As we have held the statuettes here involved copyrightable, we need not decide the question of their patentability.
Though other courts have passed upon the issue as to whether allowance by the election of the author or patentee
of one bars a grant of the other, we do not. We do hold that the patentability of the statuettes, fitted as lamps or
unfitted, does not bar copyright as works of art. Neither the Copyright Statute nor any other says that, because a
thing is patentable, it may not be copyrighted. We should not so hold.
Unlike a patent, a copyright gives no exclusive right to the art disclosed; protection is given only to the expression of
the idea -- not the idea itself. Thus, in Baker v. Selden, 101 U. S. 99, the Court held that a copyrighted book on a
peculiar system of bookkeeping was not infringed by a similar book using a similar plan which achieved similar
results where the alleged infringer made a different arrangement of the columns and used different headings. The
distinction is illustrated in Fred Fisher, Inc. v. Dillingham, 298 F. 145, 151, when the court speaks of two men, each
a perfectionist, independently making maps of the same territory. Though the maps are identical, each may obtain
the exclusive right to make copies of his own particular map, and yet neither will infringe the other's copyright.
Likewise, a copyrighted directory is not infringed by a similar directory which is the product of independent work.
The copyright protects originality, rather than novelty or invention -- conferring only "the sole right of multiplying
copies." Absent copying, there can be no infringement of copyright. Thus, respondents may not exclude others from
using statuettes of human figures in table lamps; they may only prevent use of copies of their statuettes as such or
as incorporated in some other article. Regulation § 202.8, supra, makes clear that artistic articles are protected in
"form, but not their mechanical or utilitarian aspects." See Stein v. Rosenthal, 103 F.Supp. 227, 231. The dichotomy
of protection for the aesthetic is not beauty and utility, but art for the copyright and the invention of original and
ornamental design for design patents. We find nothing in the copyright statute to support the argument that the
intended use or use in industry of an article eligible for copyright bars or invalidates its registration. We do not read
such a limitation into the copyright law.
Nor do we think the subsequent registration of a work of art published as an element in a manufactured article, is a
misuse of the copyright. This is not different from the registration of a statuette and its later embodiment in an
industrial article.
"The copyright law, like the patent statutes, makes reward to the owner a secondary consideration." United States
v. Paramount Pictures, 334 U. S. 131, 334 U. S. 158. However, it is "intended definitely to grant valuable,
enforceable rights to authors, publishers, etc., without burdensome requirements; 'to afford greater encouragement
to the production of literary [or artistic] works of lasting benefit to the world.'"
Washingtonian Pub. Co. v. Pearson, 306 U. S. 30, 306 U. S. 36.
The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction
that encouragement of individual effort by personal gain is the best way to advance public welfare through the
talents of authors and inventors in "Science and useful Arts." Sacrificial days devoted to such creative activities
deserve rewards commensurate with the services rendered. Affirmed.
——o0o——
NICHOLS v. UNIVERSAL PICTURES CORPORATION et al. 45 F.2d 119 (2d Cir. 1930)
Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.
L. HAND, Circuit Judge.
The plaintiff is the author of a play, "Abie's Irish Rose," which it may be assumed was properly copyrighted under
section five, subdivision (d), of the Copyright Act, 17 USCA §5(d). The defendant produced publicly a motion picture
play, "The Cohens and The Kellys," which the plaintiff alleges was taken from it. As we think the defendant's play
too unlike the plaintiff's to be an infringement, we may assume, arguendo, that in some details the defendant used
the plaintiff's play, as will subsequently appear, though we do not so decide. It therefore becomes necessary to give
an outline of the two plays.
"Abie's Irish Rose" presents a Jewish family living in prosperous circumstances in New York. The father, a widower,
is in business as a merchant, in which his son and only child helps him. The boy has philandered with young women,
who to his father's great disgust have always been Gentiles, for he is obsessed with a passion that his daughter-in-
law shall be an orthodox Jewess. When the play opens the son, who has been courting a young Irish Catholic girl,
has already married her secretly before a Protestant minister, and is concerned to soften the blow for his father, by
securing a favorable impression of his bride, while concealing her faith and race. To accomplish this, he introduces
her to his father at his home as a Jewess, and lets it appear that he is interested in her, though he conceals the
marriage. The girl somewhat reluctantly falls in with the plan; the father takes the bait, becomes infatuated with the
girl, concludes that they must marry, and assumes that of course they will, if he so decides. He calls in a rabbi, and
prepares for the wedding according to the Jewish rite.
Meanwhile the girl's father, also a widower, who lives in California, and is as intense in his own religious antagonism
as the Jew, has been called to New York, supposing that his daughter is to marry an Irishman and a Catholic.
Accompanied by a priest, he arrives at the house at the moment when the marriage is being celebrated, but too late
to prevent it, and the two fathers, each infuriated by the proposed union of his child to a heretic, fall into unseemly
and grotesque antics. The priest and the rabbi become friendly, exchange trite sentiments about religion, and agree
that the match is good. Apparently out of abundant caution, the priest celebrates the marriage for a third time, while
the girl's father is inveigled away. The second act closes with each father, still outraged, seeking to find some way
by which the union, thus trebly insured, may be dissolved.
The last act takes place about a year later, the young couple having meanwhile been abjured by each father, and
left to their own resources. They have had twins, a boy and a girl, but their fathers know no more than that a child
has been born. At Christmas each, led by his craving to see his grandchild, goes separately to the young folks'
home, where they encounter each other, each laden with gifts, one for a boy, the other for a girl. After some
slapstick comedy, depending upon the insistence of each that he is right about the sex of the grandchild, they
become reconciled when they learn the truth, and that each child is to bear the given name of a grandparent. The
curtain falls as the fathers are exchanging amenities, and the Jew giving evidence of an abatement in the strictness
of his orthodoxy.
"The Cohens and The Kellys" presents two families, Jewish and Irish, living side by side in the poorer quarters of
New York in a state of perpetual enmity. The wives in both cases are still living, and share in the mutual animosity,
as do two small sons, and even the respective dogs. The Jews have a daughter, the Irish a son; the Jewish father is
in the clothing business; the Irishman is a policeman. The children are in love with each other, and secretly marry,
apparently after the play opens. The Jew, being in great financial straits, learns from a lawyer that he has fallen heir
to a large fortune from a great-aunt, and moves into a great house, fitted luxuriously. Here he and his family live in
vulgar ostentation, and here the Irish boy seeks out his Jewish bride, and is chased away by the angry father. The
Jew then abuses the Irishman over the telephone, and both become hysterically excited. The extremity of his
feelings makes the Jew sick, so that he must go to Florida for a rest, just before which the daughter discloses her
marriage to her mother.
On his return, the Jew finds that his daughter has borne a child; at first he suspects the lawyer, but eventually
learns the truth and is overcome with anger at such a low alliance. Meanwhile, the Irish family who have been
forbidden to see the grandchild, go to the Jew's house, and after a violent scene between the two fathers in which
the Jew disowns his daughter, who decides to go back with her husband, the Irishman takes her back with her baby
to his own poor lodgings. [*121] The lawyer, who had hoped to marry the Jew's daughter, seeing his plan foiled,
tells the Jew that his fortune really belongs to the Irishman, who was also related to the dead woman, but offers to
conceal his knowledge, if the Jew will share the loot. This the Jew repudiates, and, leaving the astonished lawyer,
walks through the rain to his enemy's house to surrender the property. He arrives in great dejection, tells the truth,
and abjectly turns to leave. A reconciliation ensues, the Irishman agreeing to share with him equally. The Jew shows
some interest in his grandchild, though this is at most a minor motive in the reconciliation, and the curtain falls while
the two are in their cups, the Jew insisting that in the firm name for the business, which they are to carry on jointly,
his name shall stand first.
It is of course essential to any protection of literary property, whether at common-law or under the statute, that the
right cannot be limited literally to the text, else a plagiarist would escape by immaterial variations. That has never
been the law, but, as soon as literal appropriation ceases to be the test, the whole matter is necessarily at large, so
that, as was recently well said by a distinguished judge, the decisions cannot help much in a new case. Fendler v.
Morosco, 253 N.Y. 281, 292, 171 N.E. 56. When plays are concerned, the plagiarist may excise a separate scene
[Daly v. Webster, 56 F. 483 (C.C.A. 2); Chappell v. Fields, 210 F. 864 (C.C.A. 2); Chatterton v. Cave, L.R. 3 App.
Cas. 483]; or he may appropriate part of the dialogue (Warne v. Seebohm, L.R. 39 Ch. D. 73). Then the question is
whether the part so taken is "substantial," and therefore not a "fair use" of the copyrighted work; it is the same
question as arises in the case of any other copyrighted work. Marks v. Feist, 290 F. 959 (C.C.A. 2); Emerson v.
Davies, Fed. Cas. No. 4436, 3 Story, 768, 795-797. But when the plagiarist does not take out a block in situ, but an
abstract of the whole, decision is more troublesome. Upon any work, and especially upon a play, a great number of
patterns of increasing generality will fit equally well, as more and more of the incident is left out. The last may
perhaps be no more than the most general statement of what the play is about, and at times might consist only of
its title; but there is a point in this series of abstractions where they are no longer protected, since otherwise the
playwright could prevent the use of his "ideas," to which, apart from their expression, his property is never
extended. Holmes v. Hurst, 174 U.S. 82, 86, 19 S. Ct. 606, 43 L. Ed. 904; Guthrie v. Curlett, 36 F.(2d) 694 (C.C.A.
2). Nobody has ever been able to fix that boundary, and nobody ever can. In some cases the question has been
treated as though it were analogous to 3 lifting a portion out of the copyrighted work (Rees v. Melville, MacGillivray's
Copyright Cases [1911-1916], 168); but the analogy is not a good one, because, though the skeleton is a part of the
body, it pervades and supports the whole. In such cases we are rather concerned with the line between expression
and what is expressed. As respects plays, the controversy chiefly centers upon the characters and sequence of
incident, these being the substance.
We did not in Dymow v. Bolton, 11 F.(2d) 690, hold that a plagiarist was never liable for stealing a plot; that would
have been flatly against our rulings in Dam v. Kirk La Shelle Co., 175 F. 902, 41 L.R.A. (N.S.) 1002, 20 Ann. Cas.
1173, and Stodart v. Mutual Film Co., 249 F. 513, affirming my decision in (D.C.) 249 F. 507; neither of which we
meant to overrule. We found the plot of the second play was too different to infringe, because the most detailed
pattern, common to both, eliminated so much from each that its content went into the public domain; and for this
reason we said, "this mere subsection of a plot was not susceptible of copyright." But we do not doubt that two
plays may correspond in plot closely enough for infringement. How far that correspondence must go is another
matter. Nor need we hold that the same may not be true as to the characters, quite independently of the "plot"
proper, though, as far as we know, such a case has never arisen. If Twelfth Night were copyrighted, it is quite
possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe, but it would not be
enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household,
or a vain and foppish steward who became amorous of his mistress. These would be no more than Shakespeare's
"ideas" in the play, as little capable of monopoly as Einstein's Doctrine of Relativity, or Darwin's theory of the Origin
of Species. It follows that the less developed the characters, the less they can be copyrighted; that is the penalty an
author must bear for marking them too indistinctly.
In the two plays at bar we think both as to incident and character, the defendant took no more -- assuming that it
took anything at all -- than the law allowed. The stories are quite different. One is of a religious zealot [*122] who
insists upon his child's marrying no one outside his faith; opposed by another who is in this respect just like him, and
is his foil. Their difference in race is merely an obbligato to the main theme, religion. They sink their differences
through grandparental pride and affection. In the other, zealotry is wholly absent; religion does not even appear. It
is true that the parents are hostile to each other in part because they differ in race; but the marriage of their son to
a Jew does not apparently offend the Irish family at all, and it exacerbates the existing animosity of the Jew,
principally because he has become rich, when he learns it. They are reconciled through the honesty of the Jew and
the generosity of the Irishman; the grandchild has nothing whatever to do with it. The only matter common to the
two is a quarrel between a Jewish and an Irish father, the marriage of their children, the birth of grandchildren and
a reconciliation.
If the defendant took so much from the plaintiff, it may well have been because her amazing success seemed to
prove that this was a subject of enduring popularity. Even so, granting that the plaintiff's play was wholly original,
and assuming that novelty is not essential to a copyright, there is no monopoly in such a background. Though the
plaintiff discovered the vein, she could not keep it to herself; so defined, the theme was too generalized an
abstraction from what she wrote. It was only a part of her "ideas."
Nor does she fare better as to her characters. It is indeed scarcely credible that she should not have been aware of
those stock figures, the low comedy Jew and Irishman. The defendant has not taken from her more than their
prototypes have contained for many decades. If so, obviously so to generalize her copyright, would allow her to
cover what was not original with her. But we need not hold this as matter of fact, much as we might be justified.
Even though we take it that she devised her figures out of her brain de novo, still the defendant was within its
rights.
There are but four characters common to both plays, the lovers and the fathers. The lovers are so faintly indicated
as to be no more than stage properties. They are loving and fertile; that is really all that can be said of them, and
anyone else is quite within his rights if he puts loving and fertile lovers in a play of his own, wherever he gets the
cue. The plaintiff's Jew is quite unlike the defendant's. His obsession is his religion, on which depends such racial
animosity as he has. He is affectionate, warm and patriarchal. None of these fit the defendant's Jew, who shows
affection for his daughter only once, and who has none but the most superficial interest in his grandchild. He is
tricky, ostentatious and vulgar, only by misfortune redeemed into honesty. Both are grotesque, extravagant and
quarrelsome; both are fond of display; but these common qualities make up only a small part of their simple
pictures, no more than any one might lift if he chose. The Irish fathers are even more unlike; the plaintiff's a mere
symbol for religious fanaticism and patriarchal pride, scarcely a character at all. Neither quality appears in the
defendant's, for while he goes to get his grandchild, it is rather out of a truculent determination not to be forbidden,
than from pride in his progeny. For the rest he is only a grotesque hobbledehoy, used for low comedy of the most
conventional sort, which any one might borrow, if he chanced not to know the exemplar.
The defendant argues that the case is controlled by my decision in Fisher v. Dillingham (D.C.) 298 F. 145. Neither
my brothers nor I wish to throw doubt upon the doctrine of that case, but it is not applicable here. We assume that
the plaintiff's play is altogether original, even to an extent that in fact it is hard to believe. We assume further that,
so far as it has been anticipated by earlier plays of which she knew nothing, that fact is immaterial. Still, as we have
already said, her copyright did not cover everything that might be drawn from her play; its content went to some
extent into the public domain. We have to decide how much, and while we are as aware as any one that the line,
whereever it is drawn, will seem arbitrary, that is no excuse for not drawing it; it is a question such as courts must
answer in nearly all cases. Whatever may be the difficulties a priori, we have no question on which side of the line
this case falls. A comedy based upon conflicts between Irish and Jews, into which the marriage of their children
enters, is no more susceptible of copyright than the outline of Romeo and Juliet.
The plaintiff has prepared an elaborate analysis of the two plays, showing a "quadrangle" of the common characters,
in which each is represented by the emotions which he discovers. She presents the resulting parallelism as proof of
infringement, but the adjectives employed are so general as to be quite useless. Take for example the attribute of
"love" ascribed to both Jews. The plaintiff has depicted her father as deeply attached [*123] to his son, who is his
hope and joy; not so, the defendant, whose father's conduct is throughout not actuated by any affection for his
daughter, and who is merely once overcome for the moment by her distress when he has violently dismissed her
lover. "Anger" covers emotions aroused by quite different occasions in each case; so do "anxiety," "despondency"
and "disgust." It is unnecessary to go through the catalogue for emotions are too much colored by their causes to be
a test when used so broadly. This is not the proper approach to a solution; it must be more ingenuous, more like
that of a spectator, who would rely upon the complex of his impressions of each character.
We cannot approve the length of the record, which was due chiefly to the use of expert witnesses. Argument is
argument whether in the box or at the bar, and its proper place is the last. The testimony of an expert upon such
issues, especially his cross-examination, greatly extends the trial 5 and contributes nothing which cannot be better
heard after the evidence is all submitted. It ought not to be allowed at all; and while its admission is not a ground
for reversal, it cumbers the case and tends to confusion, for the more the court is led into the intricacies of dramatic
craftsmanship, the less likely it is to stand upon the firmer, if more naive, ground of its considered impressions upon
its own perusal. We hope that in this class of cases such evidence may in the future be entirely excluded, and the
case confined to the actual issues; that is, whether the copyrighted work was original, and whether the defendant
copied it, so far as the supposed infringement is identical.
The defendant, "the prevailing party," was entitled to a reasonable attorney's fee (section 40 of the Copyright Act
[17 USCA §40]).
Decree affirmed.
——o0o——
International News Service v. Associated Press, 248 U.S. 215 (1918)
No. 221
Argued May 2, 3, 1918
Decided December 23, 1918
248 U.S. 215
Syllabus
An incorporated association of proprietors and representatives of many newspapers, engaged in gathering news and
distributing it to its members for publication, is a proper party to represent them in a suit to protect their interests in
news so collected against the illegal acts of a rival organization. Equity Rule 38. P. 248 U. S. 233.
The right to object to the nonjoinder of parties may be treated as waived if not made specifically in the courts below.
Equity Rules 43, 44. P. 248 U. S. 233.
A news article in a newspaper may be copyrighted under the Act of March 4, 1909, but news, as such, is not
copyrightable. P. 248 U. S. 234
As against the public, any special interest of the producer of uncopyrighted news matter is lost upon the first
publication. Id.
But one who gathers news at pains and expense, for the purpose of lucrative publication, may be said to have a
quasi-property in the results of his enterprise as against a rival in the same business, and the appropriation of those
results at the expense and to the damage of the one and for the profit of the other is unfair competition against
which equity will afford relief. P. 248 U. S. 236.
An incorporated association of newspaper publishers gathered news at pains and expense, and, without applying for
copyright, telegraphed it daily to its members throughout the country for their exclusive use in publication, they
paying assessments therefor; a rival corporation, serving other newspapers for pecuniary returns, made a practice of
obtaining this news through early publications in newspapers and on bulletins of the first company's members, and
of sending it by telegraph, either as so taken or in rewritten form, to its own customers, thus enabling them to
compete with the newspapers of the first company in the prompt publication of news obtained for the benefit of the
latter by their exclusive agency and at their expense. Held that the first company and its members, as against the
second company, had an equitable quasi-property in the news, even after the early publications; that the use made
of it by the second company not as a mere basis for independent investigation, but by substantial appropriation for
its own gain and at the expense and to the damage of their enterprise, amounted to unfair competition which should
be enjoined irrespective of the false pretense involved in rewriting articles and in distributing the news without
mentioning the source, for this, while accentuating the wrong, was not of its essence. Pp. 248 U. S. 237 et seq., 248
U. S. 242.
Upon the pleadings and proofs in this case, held that complainant was not debarred from relief upon the ground of
unclean hands by the fact that, following a practice engaged in by the defendant also and by news agencies
generally, it had used the defendant's news items, when published, as "tips" for investigations, the results of which it
sold. P. 248 U. S. 242.
The case is stated in the opinion.
MR. JUSTICE PITNEY delivered the opinion of the Court.
The parties are competitors in the gathering and distribution of news and its publication for profit in newspapers
throughout the United States. The Associated Press, which was complainant in the district court, is a cooperative
organization, incorporated under the Membership Corporations Law of the State of New York, its members being
individuals who are either proprietors or representatives of about 950 daily newspapers published in all parts of the
United States. That a corporation may be organized under that act for the purpose of gathering news for the use
and benefit of its members and for publication in newspapers owned or represented by them is recognized by an
amendment enacted in 1901 (Laws N.Y.1901, c. 436). Complainant gathers in all parts of the world, by means of
various instrumentalities of its own, by exchange with its members, and by other appropriate means, news and
intelligence of current and recent events of interest to newspaper readers and distributes it daily to its members for
publication in their newspapers. The cost of the service, amounting approximately to $3,500,000 per annum, is
assessed upon the members and becomes a part of their costs of operation, to be recouped, presumably with profit,
through the publication of their several newspapers. Under complainant's bylaws, each member agrees upon
assuming membership that news received through complainant's service is received exclusively for publication in a
particular newspaper, language, and place specified in the certificate of membership, that no other use of it shall be
permitted, and that no member shall furnish or permit anyone in his employ or connected with his newspaper to
furnish any of complainant's news in advance of publication to any person not a member. And each member is
required to gather the local news of his district and supply it to the Associated Press, and to no one else.
Defendant is a corporation organized under the laws of the State of New Jersey, whose business is the gathering
and selling of news to its customers and clients, consisting of newspapers published throughout the United States,
under contracts by which they pay certain amounts at stated times for defendant's service. It has widespread news-
gathering agencies; the cost of its operations amounts, it is said, to more than $2,000,000 per annum, and it serves
about 400 newspapers located in the various cities of the United States and abroad, a few of which are represented,
also, in the membership of the Associated Press.
The parties are in the keenest competition between themselves in the distribution of news throughout the United
States, and so, as a rule, are the newspapers that they serve, in their several districts.
consider the underlying questions, since they go to the very merits of the action and are presented upon facts that
are not in dispute. As presented in argument, these questions are: (1) whether there is any property in news; (2)
whether, if there be property in news collected for the purpose of being published, it survives the instant of its
publication in the first newspaper to which it is communicated by the news gatherer, and (3) whether defendant's
admitted course of conduct in appropriating for commercial use matter taken from bulletins or early editions of
Associated Press publications constitutes unfair competition in trade.

The federal jurisdiction was invoked because of diversity of citizenship, not upon the ground that the suit arose
under the copyright or other laws of the United States. Complainant's news matter is not copyrighted. It is said that
Complainant in its bill, defendant in its answer, have set forth in almost identical terms the rather obvious
it could not, in practice, be copyrighted, because of the large number of dispatches that are sent daily, and,
circumstances and conditions under which their business is conducted. The value of the service, and of the news
according to complainant's contention, news is not within the operation of the copyright act. Defendant, while
furnished, depends upon the promptness of transmission, as well as upon the accuracy and impartiality of the news,
apparently conceding this, nevertheless invokes the analogies of the law of literary property and copyright, insisting
it being essential that the news be transmitted to members or subscribers as early or earlier than similar information
as its principal contention that, assuming complainant has a right of property in its news, it can be maintained
can be furnished to competing newspapers by other news services, and that the news furnished by each agency
(unless the copyright act by complied with) only by being kept secret and confidential, and that, upon the
shall not be furnished to newspapers which do not contribute to the expense of gathering it. And further, to quote
publication with complainant's consent of uncopyrighted news of any of complainant's members in a newspaper or
from the answer:
upon a bulletin board, the right of property is lost, and the subsequent use of the news by the public or by
"Prompt knowledge and publication of worldwide news is essential to the conduct of a modern newspaper, and, by defendant for any purpose whatever becomes lawful.
reason of the enormous expense incident to the gathering and distribution of such news, the only practical way in
A preliminary objection to the form in which the suit is brought may be disposed of at the outset. It is said that the
which a proprietor of a newspaper can obtain the same is either through cooperation with a considerable number of
circuit court of appeals granted relief upon considerations applicable to particular members of the Associated Press,
other newspaper proprietors in the work of collecting and distributing such news, and the equitable division with
and that this was erroneous because the suit was brought by complainant as a corporate entity, and not by its
them of the expenses thereof, or by the purchase of such news from some existing agency engaged in that
members, the argument being that their interests cannot be protected in this proceeding any more than the
business."
individual rights of a stockholder can be enforced in an action brought by the corporation. From the averments of
The bill was filed to restrain the pirating of complainant's news by defendant in three ways: first, by bribing the bill, however, it is plain that the suit in substance was brought for the benefit of complainant's members, and
employees of newspapers published by complainant's members to furnish Associated Press news to defendant that they would be proper parties, and, except for their numbers, perhaps necessary parties. Complainant is a
before publication, for transmission by telegraph and telephone to defendant's clients for publication by them; proper party to conduct the suit as representing their interest, and since no specific objection, based upon the want
second, by inducing Associated Press members to violate its bylaws and permit defendant to obtain news before of parties, appears to have been made below, we will treat the objection as waived. See Equity Rules 38, 43, 44.
publication; and, third, by copying news from bulletin boards and from early editions of complainant's newspapers
In considering the general question of property in news matter, it is necessary to recognize its dual character,
and selling this, either bodily or after rewriting it, to defendant's customers.
distinguishing between the substance of the information and the particular form or collocation of words in which the
The district court, upon consideration of the bill and answer, with voluminous affidavits on both sides, granted a writer has communicated it.
preliminary injunction under the first and second heads, but refused at that stage to restrain the systematic practice,
No doubt news articles often possess a literary quality, and are the subject of literary property at the common law;
admittedly pursued by defendant, of taking news bodily from the bulletin boards and early editions of complainant's
nor do we question that such an article, as a literary production, is the subject of copyright by the terms of the act
newspapers and selling it as its own. The court expressed itself as satisfied that this practice amounted to unfair
as it now stands. In an early case, at the circuit, Mr. Justice Thompson held in effect that a newspaper was not
trade, but, as the legal question was one of first impression, it considered that the allowance of an injunction should
within the protection of the copyright acts of 1790 and 1802. Clayton v. Stone, 2 Paine 382, 5 Fed.Cas. No. 2,872.
await the outcome of an appeal. 240 F. 983, 996. Both parties having appealed, the circuit court of appeals
But the present act is broader; it provides that the works for which copyright may be secured shall include "all the
sustained the injunction order so far as it went, and, upon complainant's appeal, modified it and remanded the
writings of an author," and specifically mentions "periodicals, including newspapers." Act of March 4, 1909, c. 320,
cause with directions to issue an injunction also against any bodily taking of the words or substance of complainant's
§§ 4 and 5, 35 Stat. 1075, 1076. Evidently this admits to copyright a contribution to a newspaper, notwithstanding it
news until its commercial value as news had passed away. 245 F. 244, 253. The present writ of certiorari was then
also may convey news, and such is the practice of the copyright office, as the newspapers of the day bear witness.
allowed. 245 U.S. 644.
See Copyright Office Bulletin No. 15 (1917) pp. 7, 14, 16, 17.
The only matter that has been argued before us is whether defendant may lawfully be restrained from appropriating
But the news element -- the information respecting current events contained in the literary production -- is not the
news taken from bulletins issued by complainant or any of its members, or from newspapers published by them, for
creation of the writer, but is a report of matters that ordinarily are publici juris; it is the history of the day. It is not
the purpose of selling it to defendant's clients. Complainant asserts that defendant's admitted course of conduct in
to be supposed that the framers of the Constitution, when they empowered Congress "to promote the progress of
this regard both violates complainant's property right in the news and constitutes unfair competition in business. And
science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective
notwithstanding the case has proceeded only to the stage of a preliminary injunction, we have deemed it proper to
writings and discoveries" (Const. Art. I, § 8, par. 8), intended to confer upon one who might happen to be the first
to report a historic event the exclusive right for any period to spread the knowledge of it.
We need spend no time, however, upon the general question of property in news matter at common law, or the
application of the copyright act, since it seems to us the case must turn upon the question of unfair competition in
business. And, in our opinion, this does not depend upon any general right of property analogous to the common
law right of the proprietor of an unpublished work to prevent its publication without his consent; nor is it foreclosed
by showing that the benefits of the copyright act have been waived. We are dealing here not with restrictions upon
publication, but with the very facilities and processes of publication. The peculiar value of news is in the spreading of
it while it is fresh, and it is evident that a valuable property interest in the news, as news, cannot be maintained by
keeping it secret. Besides, except for matters improperly disclosed, or published in breach of trust or confidence, or
in violation of law, none of which is involved in this branch of the case, the news of current events may be regarded
as common property. What we are concerned with is the business of making it known to the world, in which both
parties to the present suit are engaged. That business consists in maintaining a prompt, sure, steady, and reliable
service designed to place the daily events of the world at the breakfast table of the millions at a price that, while of
trifling moment to each reader, is sufficient in the aggregate to afford compensation for the cost of gathering and
distributing it, with the added profit so necessary as an incentive to effective action in the commercial world. The
service thus performed for newspaper readers is not only innocent but extremely useful in itself, and indubitably
constitutes a legitimate business. The parties are competitors in this field, and, on fundamental principles, applicable
here as elsewhere, when the rights or privileges of the one is liable to conflict with those of the other, each party is
under a duty so to conduct its own business as not unnecessarily or unfairly to injure that of the other. Hitchman
Coal & Coke Co. v. Mitchell, 245 U. S. 229, 245 U. S. 254.
Obviously, the question of what is unfair competition in business must be determined with particular reference to the
character and circumstances of the business. The question here is not so much the rights of either party as against
the public, but their rights as between themselves. See Morison v. Moat, 9 Hare 241, 258. And, although we may
and do assume that neither party has any remaining property interest as against the public in uncopyrighted news
matter after the moment of its first publication, it by no means follows that there is no remaining property interest in
it as between themselves. For, to both of them alike, news matter, however little susceptible of ownership or
dominion in the absolute sense, is stock in trade, to be gathered at the cost of enterprise, organization, skill, labor,
and money, and to be distributed and sold to those who will pay money for it, as for any other merchandise.
Regarding the news therefore as but the material out of which both parties are seeking to make profits at the same
time and in the same field, we hardly can fail to recognize that for this purpose, and as between them, it must be
regarded as quasi-property, irrespective of the rights of either as against the public.
In order to sustain the jurisdiction of equity over the controversy, we need not affirm any general and absolute
property in the news as such. The rule that a court of equity concerns itself only in the protection of property rights
treats any civil right of a pecuniary nature as a property right (In re Sawyer, 124 U. S. 200, 124 U. S. 210; In re
Debs, 158 U. S. 564, 158 U. S. 593), and the right to acquire property by honest labor or the conduct of a lawful
business is as much entitled to protection as the right to guard property already acquired (Truax v. Raich, 239 U. S.
33, 239 U. S. 37-38; Brennan v. United Hatters, 73 N.J.L. 729, 742; Barr v. Essex Trades Council, 53 N.J.Eq. 101). It
is this right that furnishes the basis of the jurisdiction in the ordinary case of unfair competition.
The question whether one who has gathered general information or news at pains and expense for the purpose of
subsequent publication through the press has such an interest in its publication as may be protected from
interference has been raised many times, although never, perhaps, in the precise form in which it is now presented.
Board of Trade v. Christie Grain & Stock Co., 198 U. S. 236, 198 U. S. 250, related to the distribution of quotations
of prices on dealings upon a board of trade, which were collected by plaintiff and communicated on confidential
terms to numerous persons under a contract not to make them public. This Court held that, apart from certain
special objections that were overruled, plaintiff's collection of quotations was entitled to the protection of the law;
that, like a trade secret, plaintiff might keep to itself the work done at its expense, and did not lose its right by
communicating the result to persons, even if many, in confidential relations to itself, under a contract not to make it
public, and that strangers should be restrained from getting at the knowledge by inducing a breach of trust.
In National Tel. News Co. v. Western Union Tel. Co., 119 F. 294, the Circuit Court of Appeals for the Seventh Circuit
dealt with news matter gathered and transmitted by a telegraph company, and consisting merely of a notation of
current events having but a transient value due to quick transmission and distribution, and, while declaring that this
was not copyrightable although printed on a tape by tickers in the offices of the recipients, and that it was a
commercial, not a literary, product, nevertheless held that the business of gathering and communicating the news --
the service of purveying it -- was a legitimate business, meeting a distinctive commercial want and adding to the
facilities of the business world, and partaking of the nature of property in a sense that entitled it to the protection of
a court of equity against piracy.
Other cases are cited, but none that we deem it necessary to mention.
Not only do the acquisition and transmission of news require elaborate organization and a large expenditure of
money, skill, and effort; not only has it an exchange value to the gatherer, dependent chiefly upon its novelty and
freshness, the regularity of the service, its reputed reliability and thoroughness, and its adaptability to the public
needs; but also, as is evident, the news has an exchange value to one who can misappropriate it.
The peculiar features of the case arise from the fact that, while novelty and freshness form so important an element
in the success of the business, the very processes of distribution and publication necessarily occupy a good deal of
time. Complainant's service, as well as defendant's, is a daily service to daily newspapers; most of the foreign news
reaches this country at the Atlantic seaboard, principally at the City of New York, and because of this, and of time
differentials due to the earth's rotation, the distribution of news matter throughout the country is principally from
east to west; and, since in speed the telegraph and telephone easily outstrip the rotation of the earth, it is a simple
matter for defendant to take complainant's news from bulletins or early editions of complainant's members in the
eastern cities and, at the mere cost of telegraphic transmission, cause it to be published in western papers issued at
least as early as those served by complainant. Besides this, and irrespective of time differentials, irregularities in
telegraphic transmission on different lines, and the normal consumption of time in printing and distributing the
newspaper, result in permitting pirated news to be placed in the hands of defendant's readers sometimes
simultaneously with the service of competing Associated Press papers, occasionally even earlier.
Defendant insists that when, with the sanction and approval of complainant and as the result of the use of its news
for the very purpose for which it is distributed, a portion of complainant's members communicate it to the general
public by posting it upon bulletin boards so that all may read, or by issuing it to newspapers and distributing it
indiscriminately, complainant no longer has the right to control the use to be made of it; that, when it thus reaches
the light of day, it becomes the common possession of all to whom it is accessible, and that any purchaser of a
newspaper has the right to communicate the intelligence which it contains to anybody and for any purpose, even for
the purpose of selling it for profit to newspapers published for profit in competition with complainant's members.
The fault in the reasoning lies in applying as a test the right of the complainant as against the public, instead of
considering the rights of complainant and defendant, competitors in business, as between themselves. The right of
the purchaser of a single newspaper to spread knowledge of its contents gratuitously, for any legitimate purpose not
unreasonably interfering with complainant's right to make merchandise of it, may be admitted, but to transmit that
news for commercial use, in competition with complainant -- which is what defendant has done and seeks to justify
-- is a very different matter. In doing this, defendant, by its very act, admits that it is taking material that has been
acquired by complainant as the result of organization and the expenditure of labor, skill, and money, and which is
salable by complainant for money, and that defendant, in appropriating it and selling it as its own, is endeavoring to
reap where it has not sown, and by disposing of it to newspapers that are competitors of complainant's members, is
appropriating to itself the harvest of those who have sown. Stripped of all disguises, the process amounts to an
unauthorized interference with the normal operation of complainant's legitimate business precisely at the point
where the profit is to be reaped, in order to divert a material portion of the profit from those who have earned it to
those who have not, with special advantage to defendant in the competition because of the fact that it is not
burdened with any part of the expense of gathering the news. The transaction speaks for itself, and a court of equity
ought not to hesitate long in characterizing it as unfair competition in business.
The underlying principle is much the same as that which lies at the base of the equitable theory of consideration in
the law of trusts -- that he who has fairly paid the price should have the beneficial use of the property. Pom.Eq. Jur.
§ 981. It is no answer to say that complainant spends its money for that which is too fugitive or evanescent to be
the subject of property. That might, and for the purposes of the discussion we are assuming that it would, furnish an
answer in a common law controversy. But, in a court of equity, where the question is one of unfair competition, if
that which complainant has acquired fairly at substantial cost may be sold fairly at substantial profit, a competitor
who is misappropriating it for the purpose of disposing of it to his own profit and to the disadvantage of complainant
cannot be heard to say that it is too fugitive or evanescent to be regarded as property. It has all the attributes of
property necessary for determining that a misappropriation of it by a competitor is unfair competition because
contrary to good conscience.
The contention that the news is abandoned to the public for all purposes when published in the first newspaper is
untenable. Abandonment is a question of intent, and the entire organization of the Associated Press negatives such
a purpose. The cost of the service would be prohibitive if the reward were to be so limited. No single newspaper, no
small group of newspapers, could sustain the expenditure. Indeed, it is one of the most obvious results of
defendant's theory that, by permitting indiscriminate publication by anybody and everybody for purposes of profit in
competition with the news-gatherer, it would render publication profitless, or so little profitable as in effect to cut off
the service by rendering the cost prohibitive in comparison with the return. The practical needs and requirements of
the business are reflected in complainant's bylaws which have been referred to. Their effect is that publication by
each member must be deemed not by any means an abandonment of the news to the world for any and all
purposes, but a publication for limited purposes; for the benefit of the readers of the bulletin or the newspaper as
such; not for the purpose of making merchandise of it as news, with the result of depriving complainant's other
members of their reasonable opportunity to obtain just returns for their expenditures.
It is to be observed that the view we adopt does not result in giving to complainant the right to monopolize either
the gathering or the distribution of the news, or, without complying with the copyright act, to prevent the
reproduction of its news articles, but only postpones participation by complainant's competitor in the processes of
distribution and reproduction of news that it has not gathered, and only to the extent necessary to prevent that
competitor from reaping the fruits of complainant's efforts and expenditure, to the partial exclusion of complainant.
and in violation of the principle that underlies the maxim "sic utere tuo," etc.
It is said that the elements of unfair competition are lacking because there is no attempt by defendant to palm off its
goods as those of the complainant, characteristic of the most familiar, if not the most typical, cases of unfair
competition. Howe Scale Co. v. Wyckoff, Seamans, & Benedict, 198 U. S. 118, 198 U. S. 140. But we cannot
concede that the right to equitable relief is confined to that class of cases. In the present case, the fraud upon
complainant's rights is more direct and obvious. Regarding news matter as the mere material from which these two
competing parties are endeavoring to make money, and treating it therefore as quasi-property for the purposes of
their business because they are both selling it as such, defendant's conduct differs from the ordinary case of unfair
competition in trade principally in this -- that, instead of selling its own goods as those of complainant, it substitutes
misappropriation in the place of misrepresentation, and sells complainant's goods as its own.
Besides the misappropriation, there are elements of imitation, of false pretense, in defendant's practices. The device
of rewriting complainant's news articles, frequently resorted to, carries its own comment. The habitual failure to give
credit to complainant for that which is taken is significant. Indeed, the entire system of appropriating complainant's
news and transmitting it as a commercial product to defendant's clients and patrons amounts to a false
representation to them and to their newspaper readers that the news transmitted is the result of defendant's own
investigation in the field. But these elements, although accentuating the wrong, are not the essence of it. It is
something more than the advantage of celebrity of which complainant is being deprived.
The doctrine of unclean hands is invoked as a bar to relief, it being insisted that defendant's practices against which
complainant seeks an injunction are not different from the practice attributed to complainant of utilizing defendant's
news published by its subscribers. At this point, it becomes necessary to consider a distinction that is drawn by
complainant, and, as we understand it, was recognized by defendant also in the submission of proofs in the district
court, between two kinds of use that may be made by one news agency of news taken from the bulletins and
newspapers of the other. The first is the bodily appropriation of a statement of fact or a news article, with or without
rewriting, but without independent investigation or other expense. This form of pirating was found by both courts to
have been pursued by defendant systematically with respect to complainant's news, and against it the circuit court
of appeals granted an injunction. This practice complainant denies having pursued, and the denial was sustained by
the finding of the district court. It is not contended by defendant that the finding can be set aside upon the proofs as
they now stand. The other use is to take the news of a rival agency as a "tip" to be investigated, and, if verified by
independent investigation, the news thus gathered is sold. This practice complainant admits that it has pursued, and
still is willing that defendant shall employ.
Both courts held that complainant could not be debarred on the ground of unclean hands upon the score of pirating
defendant's news, because not shown to be guilty of sanctioning this practice.
As to securing "tips" from a competing news agency, the district court (240 F. 991, 995), while not sanctioning the
practice, found that both parties had adopted it in accordance with common business usage in the belief that their
conduct was technically lawful, and hence did not find in it any sufficient ground for attributing unclean hands to
complainant. The circuit court of appeals (245 F. 247) found that the tip habit, though discouraged by complainant,
was "incurably journalistic," and that there was "no difficulty in discriminating between the utilization of tips and the
bodily appropriation of another's labor in accumulating and stating information."
We are inclined to think a distinction may be drawn between the utilization of tips and the bodily appropriation of
news matter, either in its original form or after rewriting and without independent investigation and verification;
whatever may appear at the final hearing, the proofs as they now stand recognize such a distinction; both parties
avowedly recognize the practice of taking tips, and neither party alleges it to be unlawful or to amount to unfair
competition in business. In a line of English cases, a somewhat analogous practice has been held not to amount to
an infringement of the copyright of a directory or other book containing compiled information. In Kelly v. Morris, L.R.
1 Eq. 697, 701, 702, Vice Chancellor Sir William Page Wood (afterwards Lord Hatherly), dealing with such a case,
said that defendant was "not entitled to take one word of the information previously published without
independently working out the matter for himself, so as to arrive at the same result from the same common sources
of information, and the only use that he can legitimately make of a previous publication is to verify his own
calculations and results when obtained."
This was followed by Vice Chancellor Giffard, in Morris v. Ashbee, L.R. 7 Eq. 34, where he said:
"In a case such as this, no one has a right to take the results of the labour and expense incurred by another for the
purposes of a rival publication, and thereby save himself the expense and labour of working out and arriving at
these results by some independent road."
A similar view was adopted by Lord Chancellor Hatherly and the former Vice Chancellor, then Giffard, L.J., in Pike v.
Nicholas, L.R. 5 Ch.App.Cas. 251, and shortly afterwards by the latter judge in Morris v. Wright, L.R. 5 Ch.App.Cas.
279, 287, where he said, commenting upon Pike v. Nicholas:
"It was a perfectly legitimate course for the defendant to refer to the plaintiff's book, and if, taking that book as his
guide, he went to the original authorities and compiled his book from them, he made no unfair or improper use of
the plaintiff's book, and so here, if the fact be that Mr. Wright used the plaintiff's book in order to guide himself to
the persons on whom it would be worth his while to call, and for no other purpose, he made a perfectly legitimate
use of the plaintiff's book."
A like distinction was recognized by the Circuit Court of Appeals for the Second Circuit in Edward Thompson Co. v.
American Law Book Co., 122 F. 922, and in West Publishing Co. v. Edward Thompson Co., 176 F. 833, 838.
In the case before us, in the present state of the pleadings and proofs, we need go no further than to hold, as we
do, that the admitted pursuit by complainant of the practice of taking news items published by defendant's
subscribers as tips to be investigated, and, if verified, the result of the investigation to be sold -- the practice having
been followed by defendant also, and by news agencies generally -- is not shown to be such as to constitute an
unconscientious or inequitable attitude towards its adversary so as to fix upon complainant the taint of unclean
hands, and debar it on this ground from the relief to which it is otherwise entitled.
There is some criticism of the injunction that was directed by the district court upon the going down of the mandate
from the circuit court of appeals. In brief, it restrains any taking or gainfully using of the complainant's news, either
bodily or in substance, from bulletins issued by the complainant or any of its members, or from editions of their
newspapers, "until its commercial value as news to the complainant and all of its members has passed away." The
part complained of is the clause we have italicized, but if this be indefinite, it is no more so than the criticism.
Perhaps it would be better that the terms of the injunction be made specific, and so framed as to confine the
restraint to an extent consistent with the reasonable protection of complainant's newspapers, each in its own area
and for a specified time after its publication, against the competitive use of pirated news by defendant's customers.
But the case presents practical difficulties, and we have not the materials, either in the way of a definite suggestion
of amendment or in the way of proofs, upon which to frame a specific injunction; hence, while not expressing
approval of the form adopted by the district court, we decline to modify it at this preliminary stage of the case, and
will leave that court to deal with the matter upon appropriate application made to it for the purpose.
The decree of the Circuit court of Appeals will be
Affirmed.
MR. JUSTICE CLARKE took no part in the consideration or decision of this case.
MR. JUSTICE HOLMES, dissenting.
When an uncopyrighted combination of words is published, there is no general right to forbid other people repeating
them -- in other words, there is no property in the combination or in the thoughts or facts that the words express.
Property, a creation of law, does not arise from value, although exchangeable -- a matter of fact. Many
exchangeable values may be destroyed intentionally without compensation. Property depends upon exclusion by law
from interference, and a person is not excluded from using any combination of words merely because some one has
used it before, even if it took labor and genius to make it. If a given person is to be prohibited from making the use
of words that his neighbors are free to make, some other ground must be found. One such ground is vaguely
expressed in the phrase unfair trade. This means that the words are repeated by a competitor in business in such a
way as to convey a misrepresentation that materially injures the person who first used them, by appropriating credit
of some kind which the first user has earned. The ordinary case is a representation by device, appearance, or other
indirection that the defendant's goods come from the plaintiff. But the only reason why it is actionable to make such
a representation is that it tends to give the defendant an advantage in his competition with the plaintiff, and that it
is thought undesirable that an advantage should be gained in that way. Apart from that, the defendant may use
such unpatented devices and uncopyrighted combinations of words as he likes. The ordinary case, I say, is palming
off the defendant's product as the plaintiff's, but the same evil may follow from the opposite falsehood -- from
saying whether, in words or by implication, that the plaintiff's product is the defendant's, and that, it seems to me, is
what has happened here.
Fresh news is got only by enterprise and expense. To produce such news as it is produced by the defendant
represents by implication that it has been acquired by the defendant's enterprise and at its expense. When it comes
from one of the great news collecting agencies like the Associated Press, the source generally is indicated, plainly
importing that credit, and that such a representation is implied may be inferred with some confidence from the
unwillingness of the defendant to give the credit and tell the truth. If the plaintiff produces the news at the same
time that the defendant does, the defendant's presentation impliedly denies to the plaintiff the credit of collecting
the facts, and assumes that credit to the defendant. If the plaintiff is later in Western cities, it naturally will be
supposed to have obtained its information from the defendant. The falsehood is a little more subtle, the injury a little
more indirect, than in ordinary cases of unfair trade, but I think that the principle that condemns the one condemns
the other. It is a question of how strong an infusion of fraud is necessary to turn a flavor into a poison. The does
seems to me strong enough here to need a remedy from the law. But as, in my view, the only ground of complaint
that can be recognized without legislation is the implied misstatement, it can be corrected by stating the truth, and a
suitable acknowledgment of the source is all that the plaintiff can require. I think that, within the limits recognized
by the decision of the Court, the defendant should be enjoined from publishing news obtained from the Associated
Press for hours after publication by the plaintiff unless it gives express credit to the Associated Press, the number of
hours and the form of acknowledgment to be settled by the district court.
MR. JUSTICE McKENNA concurs in this opinion.
MR. JUSTICE BRANDEIS, dissenting.
There are published in the United States about 2,500 daily papers. More than 800 of them are supplied with
domestic and foreign news of general interest by the Associated Press -- a corporation without capital stock which
does not sell news or earn or seek to earn profits, but serves merely as an instrumentality by means of which these
papers supply themselves at joint expense with such news. Papers not members of the Associated Press depend for
their news of general interest largely upon agencies organized for profit. Among these agencies is the International
News Service, which supplies news to about 400 subscribing papers. It has, like the Associated Press, bureaus and
correspondents in this and foreign countries, and its annual expenditures in gathering and distributing news is about
$2,000,000. Ever since its organization in 1909, it has included among the sources from which it gathers news,
copies (purchased in the open market) of early editions of some papers published by members of the Associated
Press and the bulletins publicly posted by them. These items, which constitute but a small part of the news
transmitted to its subscribers, are generally verified by the International News Service before transmission, but
frequently items are transmitted without verification, and occasionally even without being rewritten. In no case is the
fact disclosed that such item was suggested by or taken from a paper or bulletin published by an Associated Press
member.
No question of statutory copyright is involved. The sole question for our consideration is this: was the International
News Service properly enjoined from using, or causing to be used gainfully news of which it acquired knowledge by
lawful means (namely, by reading publicly posted bulletins or papers purchased by it in the open market) merely
because the news had been originally gathered by the Associated Press and continued to be of value to some of its
members, or because it did not reveal the source from which it was acquired?
The "ticker" cases, the cases concerning literary and artistic compositions, and cases of unfair competition were
relied upon in support of the injunction. But it is admitted that none of those cases affords a complete analogy with
that before us. The question presented for decision is new, and it is important.
News is a report of recent occurrences. The business of the news agency is to gather systematically knowledge of
such occurrences of interest and to distribute reports thereof. The Associated Press contended that knowledge so
acquired is property, because it costs money and labor to produce and because it has value for which those who
have it not are ready to pay; that it remains property and is entitled to protection as long as it has commercial value
as news, and that to protect it effectively, the defendant must be enjoined from making, or causing to be made, any
gainful use of it while it retains such value. An essential element of individual property is the legal right to exclude
others from enjoying it. If the property is private, the right of exclusion may be absolute; if the property is affected
with a public interest, the right of exclusion is qualified. But the fact that a product of the mind has cost its producer
money and labor, and has a value for which others are willing to pay, is not sufficient to ensure to it this legal
attribute of property. The general rule of law is that the noblest of human productions -- knowledge, truths
ascertained, conceptions, and ideas -- became, after voluntary communication to others, free as the air to common
use. Upon these incorporeal productions the attribute of property is continued after such communication only in
certain classes of cases where public policy has seemed to demand it. These exceptions are confined to productions
which, in some degree, involve creation, invention, or discovery. But by no means all such are endowed with this
attribute of property. The creations which are recognized as property by the common law are literary, dramatic,
musical, and other artistic creations, and these have also protection under the copyright statutes. The inventions and
discoveries upon which this attribute of property is conferred only by statute are the few comprised within the patent
law. There are also many other cases in which courts interfere to prevent curtailment of plaintiff's enjoyment of
incorporal productions, and in which the right to relief is often called a property right, but is such only in a special
sense. In those cases, the plaintiff has no absolute right to the protection of his production; he has merely the
qualified right to be protected as against the defendant's acts, because of the special relation in which the latter
stands or the wrongful method or means employed in acquiring the knowledge or the manner in which it is used.
Protection of this character is afforded where the suit is based upon breach of contract or of trust or upon unfair
competition.
The knowledge for which protection is sought in the case at bar is not of a kind upon which the law has heretofore
conferred the attributes of property; nor is the manner of its acquisition or use nor the purpose to which it is
applied, such as has heretofore been recognized as entitling a plaintiff to relief.
First. Plaintiff's principal reliance was upon the "ticker" cases; but they do not support its contention. The leading
cases on this subject rest the grant of relief not upon the existence of a general property right in news, but upon the
breach of a contract or trust concerning the use of news communicated, and that element is lacking here. In Board
of Trade v. Christie Grain & Stock Co., 198 U. S. 236, 198 U. S. 250, the Court said the Board "does not lose its
rights by communicating the result [the quotations] to persons, even if many, in confidential relations to itself, under
a contract not to make it public, and strangers to the trust will be restrained from getting at the knowledge by
inducing a breach of trust and using knowledge obtained by such a breach."
And it is also stated there (p. 198 U. S. 251):
"Time is of the essence in matters like this, and it fairly may be said that, if the contracts with the plaintiff are kept,
the information will not become public property until the plaintiff has gained its reward."
The only other case in this Court which relates to this subject is Hunt v. N.Y. Cotton Exchange, 205 U.S. 322. While
the opinion there refers the protection to a general property right in the quotations, the facts are substantially the
same as those in the Christie case, which is the chief authority on which the decision is based. Of the cases in the
lower federal courts and in the state courts, it may be said that most of them too can, on their facts, be reconciled
with this principle, though much of the language of the courts cannot be. In spite of anything that may appear in
these cases to the contrary, it seems that the true principle is stated in the Christie case, that the collection of
quotations "stands like a trade secret." And in Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373, 220 U. S.
402, this Court says of trade secret:
"Anyone may use it who fairly, by analysis and experiment, discovers it. But the complainant is entitled to be
protected against invasion of its right in the process by fraud or by breach of trust or contract."
The leading English case, Exchange Telegraph Co. v. Gregory & Co., [1896] 1 Q.B. 147, is also rested clearly upon a
breach of contract or trust, although there is some reference to a general property right. The later English cases
seem to have rightly understood the basis of the decision, and they have not sought to extend it further than was
intended. Indeed, we find the positive suggestion in some cases that the only ground for relief is the manner in
which knowledge of the report of the news was acquired.
If the news involved in the case at bar had been posted in violation of any agreement between the Associated Press
and its members, questions similar to those in the "ticker" cases might have arisen. But the plaintiff does not
contend that the posting was wrongful, or that any papers were wrongfully issued by its subscribers. On the
contrary, it is conceded that both the bulletins and the papers were issued in accordance with the regulations of the
plaintiff. Under such circumstances, for a reader of the papers purchased in the open market, or a reader of the
bulletins publicly posted, to procure and use gainfully, information therein contained does not involve inducing
anyone to commit a breach either of contract or of trust, or committing or in any way abetting a breach of
confidence.
Second. Plaintiff also relied upon the cases which hold that the common law right of the producer to prohibit copying
is not lost by the private circulation of a literary composition, the delivery of a lecture, the exhibition of a painting, or
the performance of a dramatic or musical composition. These cases rest upon the ground that the common law
recognizes such productions as property which, despite restricted communication, continues until there is a
dedication to the public under the copyright statutes or otherwise. But they are inapplicable for two reasons: (1) At
common law, as under the copyright acts, intellectual productions are entitled to such protection only if there is
underneath something evincing the mind of a creator or originator, however modest the requirement. The mere
record of isolated happenings, whether, in words or by photographs not involving artistic skill, are denied such
protection. (2) At common law, as under the copyright acts, the element in intellectual productions which secures
such protection is not the knowledge, truths, ideas, or emotions which the composition expresses, but the form or
sequence in which they are expressed -- that is, "some new collocation of visible or audible points -- of lines, colors,
sounds, or words." See White-Smith Music Co. v. Apollo Co., 209 U. S. 1, 209 U. S. 19; Kalem Co. v. Harper Bros.,
222 U. S. 55, 222 U. S. 63. An author's theories, suggestions, and speculations, or the systems, plans, methods, and
arrangements of an originator derive no such protection from the statutory copyright of the book in which they are
set forth, and they are likewise denied such protection at common law
That news is not property in the strict sense is illustrated by the case of Sports and General Press Agency, Ltd. v.
"Our Dogs" Publishing Co., Ltd., [1916] 2 K.B. 880, where the plaintiff, the assignee of the right to photograph the
exhibits at a dog show, was refused an injunction against defendant who had also taken pictures of the show and
was publishing them. The court said that, except insofar as the possession of the land occupied by the show enabled
the proprietors to exclude people or permit them on condition that they agree not to take photographs (which
condition was not imposed in that case), the proprietors had no exclusive right to photograph the show, and could
therefore grant no such right. And it was further stated that, at any rate, no matter what conditions might be
imposed upon those entering the grounds, if the defendant had been on top of a house or in some position where
he could photograph the show without interfering with the physical property of the plaintiff, the plaintiff would have
no right to stop him. If, when the plaintiff creates the event recorded, he is not entitled to the exclusive first
publication of the news (in that case, a photograph) of the event, no reason can be shown why he should be
accorded such protection as to events which he simply records and transmits to other parts of the world, though
with great expenditure of time and money.
Third. If news be treated as possessing the characteristics not of a trade secret, but of literary property, then the
earliest issue of a paper of general circulation or the earliest public posting of a bulletin which embodies such news
would, under the established rules governing literary property, operate as a publication, and all property in the news
would then cease. Resisting this conclusion, plaintiff relied upon the cases which hold that uncopyrighted intellectual
and artistic property survives private circulation or a restricted publication, and it contended that, in each issue of
each paper, a restriction is to be implied that the news shall not be used gainfully in competition with the Associated
Press or any of its members. There is no basis for such an implication. But it is also well settled that where the
publication is in fact a general one, even express words of restriction upon use are inoperative. In other words, a
general publication is effective to dedicate literary property to the public, regardless of the actual intent of its owner.
In the cases dealing with lectures, dramatic and musical performances, and art exhibitions upon which plaintiff
relied, there was no general publication in print comparable to the issue of daily newspapers or the unrestricted
public posting of bulletins. The principles governing those cases differ more or less in application, if not in theory,
from the principles governing the issue of printed copies, and insofar as they do differ, they have no application to
the case at bar.
Fourth. Plaintiff further contended that defendant's practice constitutes unfair competition because there is
"appropriation without cost to itself of values created by" the plaintiff, and it is upon this ground that the decision of
this Court appears to be based. To appropriate and use for profit, knowledge, and ideas produced by other men
without making compensation or even acknowledgment may be inconsistent with a finer sense of propriety, but,
with the exceptions indicated above, the law has heretofore sanctioned the practice. Thus, it was held that one may
ordinarily make and sell anything in any form, may copy with exactness that which another has produced, or may
otherwise use his ideas without his consent and without the payment of compensation, and yet not inflict a legal
injury, and that ordinarily one is at perfect liberty to find out, if he can by lawful means, trade secrets of another,
however valuable, and then use the knowledge so acquired gainfully, although it cost the original owner much in
effort and in money to collect or produce.
Such taking and gainful use of a product of another which, for reasons of public policy, the law has refused to
endow with the attributes of property does not become unlawful because the product happens to have been taken
from a rival and is used in competition with him. The unfairness in competition which hitherto has been recognized
by the law as a basis for relief lay in the manner or means of conducting the business, and the manner or means
held legally unfair involves either fraud or force or the doing of acts otherwise prohibited by law. In the "passing off"
cases (the typical and most common case of unfair competition), the wrong consists in fraudulently representing by
word or act that defendant's goods are those of plaintiff. See Hanover Milling Co. v. Metcalf, 240 U. S. 403, 240 U. S.
412-413. In the other cases, the diversion of trade was effected through physical or moral coercion, or by inducing
breaches of contract or of trust or by enticing away employees. In some others, called cases of simulated
competition, relief was granted because defendant's purpose was unlawful -- namely, not competition, but deliberate
and wanton destruction of plaintiff's business.
That competition is not unfair in a legal sense merely because the profits gained are unearned, even if made at the
expense of a rival, is shown by many cases besides those referred to above. He who follows the pioneer into a new
market, or who engages in the manufacture of an article newly introduced by another, seeks profits due largely to
the labor and expense of the first adventurer, but the law sanctions, indeed encourages, the pursuit. He who makes
a city known through his product must submit to sharing the resultant trade with others who, perhaps for that
reason, locate there later. Canal Co. v. Clark, 13 Wall. 311; Elgin National Watch Co. v. Illinois Watch Co., 179 U. S.
665, 179 U. S. 673. He who has made his name a guaranty of quality protests in vain when another with the same
name engages, perhaps for that reason, in the same lines of business, provided precaution is taken to prevent the
public from being deceived into the belief that what he is selling was made by his competitor. One bearing a name
made famous by another is permitted to enjoy the unearned benefit which necessarily flows from such use, even
though the use proves harmful to him who gave the name value. Brown Chemical Co. v. Meyer, 139 U. S. 540, 139
U. S. 544; Howe Scale Co. v. Wyckoff, Seamans & Benedict, 198 U. S. 118; Donnell v. Herring-Hall-Marvin Safe Co.,
208 U. S. 267; Waterman Co. v. Modern Pen Co., 235 U. S. 88. See Saxlehner v. Wagner, 216 U. S. 375.
The means by which the International News Service obtains news gathered by the Associated Press is also clearly
unobjectionable. It is taken from papers bought in the open market or from bulletins publicly posted.
No breach of contract such as the court considered to exist in Hitchman Coal & Coke Co. v. Mitchell, 245 U. S. 229,
245 U. S. 254, or of trust such as was present in Morison v. Moat, 9 Hare, 241, and neither fraud nor force is
involved. The manner of use is likewise unobjectionable. No reference is made by word or by act to the Associated
Press, either in transmitting the news to subscribers or by them in publishing it in their papers. Neither the
International News Service nor its subscribers is gaining or seeking to gain in its business a benefit from the
reputation of the Associated Press. They are merely using its product without making compensation. See Bamforth
v. Douglass Post Card & Machine Co., 158 F. 355; Tribune Co. of Chicago v. Associated Press, 116 F. 126. That they
have a legal right to do, because the product is not property, and they do not stand in any relation to the Associated
Press, either of contract or of trust, which otherwise precludes such use. The argument is not advanced by
characterizing such taking and use a misappropriation.
It is also suggested that the fact that defendant does not refer to the Associated Press as the source of the news
may furnish a basis for the relief. But the defendant and its subscribers, unlike members of the Associated Press,
were under no contractual obligation to disclose the source of the news, and there is no rule of law requiring
acknowledgment to be made where uncopyrighted matter is reproduced. The International News Service is said to
mislead its subscribers into believing that the news transmitted was originally gathered by it, and that they in turn
mislead their readers. There is, in fact, no representation by either of any kind. Sources of information are
sometimes given because required by contract, sometimes because naming the source gives authority to an
otherwise incredible statement, and sometimes the source is named because the agency does not wish to take the
responsibility itself of giving currency to the news. But no representation can properly be implied from omission to
mention the source of information except that the International News Service is transmitting news which it believes
to be credible.
Nor is the use made by the International News Service of the information taken from papers or bulletins of
Associated Press members legally objectionable by reason of the purpose for which it was employed. The acts here
complained of were not done for the purpose of injuring the business of the Associated Press. Their purpose was not
even to divert its trade, or to put it at a disadvantage by lessening defendant's necessary expenses. The purpose
was merely to supply subscribers of the International News Service promptly with all available news. The suit is, as
this Court declares, in substance one brought for the benefit of the members of the Associated Press, who would be
proper, and except for their number perhaps necessary, parties, and the plaintiff conducts the suit as representing
their interests. It thus appears that the protection given by the injunction is not actually to the business of the
complainant news agency; for this agency does not sell news nor seek to earn profits, but is a mere instrumentality
by which 800 or more newspapers collect and distribute news. It is these papers severally which are protected, and
the protection afforded is not from competition of the defendant, but from possible competition of one or more of
the 400 other papers which receive the defendant's service. Furthermore, the protection to these Associated Press
members consists merely in denying to other papers the right to use as news, information which by authority of all
concerned, had theretofore been given to the public by some of those who joined in gathering it, and to which the
law denies the attributes of property. There is in defendant's purpose nothing on which to base a claim for relief.
It is further said that, while that for which the Associated Press spends its money is too fugitive to be recognized as
property in the common law courts, the defendant cannot be heard to say so in a court of equity, where the
question is one of unfair competition. The case presents no elements of equitable title or of breach of trust. The only
possible reason for resort to a court of equity in a case like this is that the remedy which the law gives is inadequate.
If the plaintiff has no legal cause of action, the suit necessarily fails. Levy v. Walker, L.R. 10 Ch.D. 436, 449. There is
nothing in the situation of the parties which can estop the defendant from saying so.
Fifth. The great development of agencies now furnishing countrywide distribution of news, the vastness of our
territory, and improvements in the means of transmitting intelligence, have made it possible for a news agency or
newspapers to obtain, without paying compensation, the fruit of another's efforts and to use news so obtained
gainfully in competition with the original collector. The injustice of such action is obvious. But to give relief against it
would involve more than the application of existing rules of law to new facts. It would require the making of a new
rule in analogy to existing ones. The unwritten law possesses capacity for growth, and has often satisfied new
demands for justice by invoking analogies or by expanding a rule or principle. This process has been in the main
wisely applied, and should not be discontinued. Where the problem is relatively simple, as it is apt to be when
private interests only are involved, it generally proves adequate. But with the increasing complexity of society, the
public interest tends to become omnipresent, and the problems presented by new demands for justice cease to be
simple. Then the creation or recognition by courts of a new private right may work serious injury to the general
public unless the boundaries of the right are definitely established and wisely guarded. In order to reconcile the new
private right with the public interest, it may be necessary to prescribe limitations and rules for its enjoyment, and
also to provide administrative machinery for enforcing the rules. It is largely for this reason that, in the effort to
meet the many new demands for justice incident to a rapidly changing civilization, resort to legislation has latterly
been had with increasing frequency.
The rule for which the plaintiff contends would effect an important extension of property rights and a corresponding
curtailment of the free use of knowledge and of ideas, and the facts of this case admonish us of the danger involved
in recognizing such a property right in news, without imposing upon news-gatherers corresponding obligations. A
large majority of the newspapers and perhaps half the newspaper readers of the United States are dependent for
their news of general interest upon agencies other than the Associated Press. The channel through which about 400
of these papers received, as the plaintiff alleges, "a large amount of news relating to the European war of the
greatest importance and of intense interest to the newspaper reading public" was suddenly closed. The closing to
the International News Service of these channels for foreign news (if they were closed) was due not to unwillingness
on its part to pay the cost of collecting the news, but to the prohibitions imposed by foreign governments upon its
securing news from their respective countries and from using cable or telegraph lines running therefrom. For aught
that appears, this prohibition may have been wholly undeserved, and at all events the 400 papers and their readers
may be assumed to have been innocent. For aught that appears, the International News Service may have sought
then to secure temporarily by arrangement with the Associated Press the latter's foreign news service. For aught
that appears, all of the 400 subscribers of the International News Service would gladly have then become members
of the Associated Press if they could have secured election thereto. It is possible also that a large part of the readers
of these papers were so situated that they could not secure prompt access to papers served by the Associated Press.
The prohibition of the foreign governments might as well have been extended to the channels through which news
was supplied to the more than a thousand other daily papers in the United States not served by the Associated
Press, and a large part of their readers may also be so located that they cannot procure prompt access to papers
served by the Associated Press.
A legislature, urged to enact a law by which one news agency or newspaper may prevent appropriation of the fruits
of its labors by another, would consider such facts and possibilities and others which appropriate inquiry might
disclose. Legislators might conclude that it was impossible to put an end to the obvious injustice involved in such
appropriation of news without opening the door to other evils greater than that sought to be remedied. Such
appears to have been the opinion of our Senate, which reported unfavorably a bill to give news a few hours'
protection, and which ratified, on February 15, 1911, the convention adopted at the Fourth International American
Conference, and such was evidently the view also of the signatories to the International Copyright Union of
November 13, 1908, as both these conventions expressly exclude news from copyright protection.
Or legislators dealing with the subject might conclude, that the right to news values should be protected to the
extent of permitting recovery of damages for any unauthorized use, but that protection by injunction should be
denied, just as courts of equity ordinarily refuse (perhaps in the interest of free speech) to restrain actionable libels,
and for other reasons decline to protect by injunction mere political rights, and as Congress has prohibited courts
from enjoining the illegal assessment or collection of federal taxes. If a legislature concluded to recognize property in
published news to the extent of permitting recovery at law, it might, with a view to making the remedy more certain
and adequate, provide a fixed measure of damages, as in the case of copyright infringement.
Or again, a legislature might conclude that it was unwise to recognize even so limited a property right in published
news as that above indicated, but that a news agency should, on some conditions, be given full protection of its
business, and, to that end, a remedy by injunction as well as one for damages should be granted where news
collected by it is gainfully used without permission. If a legislature concluded (as at least one court has held, New
York & Chicago Grain & Stock Exchange v. Board of Trade, 127 Ill. 153) that, under certain circumstances, news-
gathering is a business affected with a public interest, it might declare that, in such cases, news should be protected
against appropriation only if the gatherer assumed the obligation of supplying it at reasonable rates and without
discrimination, to all papers which applied therefor. If legislators reached that conclusion, they would probably go
further, and prescribe the conditions under which and the extent to which the protection should be afforded, and
they might also provide the administrative machinery necessary for insuring to the public, the press, and the news
agencies, full enjoyment of the rights so conferred.
Courts are ill equipped to make the investigations which should precede a determination of the limitations which
should be set upon any property right in news or of the circumstances under which news gathered by a private
agency should be deemed affected with a public interest. Courts would be powerless to prescribe the detailed
regulations essential to full enjoyment of the rights conferred or to introduce the machinery required for
enforcement of such regulations. Considerations such as these should lead us to decline to establish a new rule of
law in the effort to redress a newly disclosed wrong, although the propriety of some remedy appears to be clear.
——o0o——
Bleistein v. Donaldson Lithographing Co., 188 U.S. 239 (1903)
ERROR TO THE CIRCUIT COURT OF APPEALS FOR THE SIXTH CIRCUIT
Syllabus
Chromolithographs representing actual groups of persons and things, which have been designed from hints or
descriptions of the scenes represented, and which are to be used as advertisements for a circus are "pictorial
illustrations" within the meaning of Rev.Stat. § 4962, allowing a copyright to the "author, designer, or proprietor . . .
of any engraving, cut, print, . . . or chromo" as affected by the act of 1874, c. 301, § 3, 18 Stat. 78, 79. And on
complying with all the statutory requirements, the proprietors are entitled to the protection of the copyright laws.
The case is stated in the opinion of the Court.
MR. JUSTICE HOLMES delivered the opinion of the Court.
This case comes here from the United States Circuit Court of Appeals for the Sixth Circuit by writ of error. Act of
March 3, 1891, 26 Stat. 828, s. 517, § 6. It is an action brought by the plaintiffs in error to recover the penalties
prescribed for infringements of copyrights. Rev.Stat. §§ 4952, 4956, 4965, amended by Act of March 3, 1891, 26
Stat. 1109, c. 565, and Act of March 2, 1895, 28 Stat. 965, c. 194. The alleged infringements consisted in the
copying in reduced form of three chromolithographs prepared by employees of the plaintiffs for advertisements of a
circus owned by one Wallace. Each of the three contained a portrait of Wallace in the corner, and lettering bearing
some slight relation to the scheme of decoration, indicating the subject of the design and the fact that the reality
was to be seen at the circus. One of the designs was of an ordinary ballet, one of a number of men and women,
described as the Stirk family, performing on bicycles, and one of groups of men and women whitened to represent
statues. The circuit court directed a verdict for the defendant on the ground that the chromolithographs were not
within the protection of the copyright law, and this ruling was sustained by the circuit court of appeals. Courier
Lithographing Co. v. Donaldson Lithographing Co., 104 F. 993.
There was evidence warranting the inference that the designs belonged to the plaintiffs, they having been produced
by persons employed and paid by the plaintiffs in their establishment to make those very things. Gill v. United
States, 160 U. S. 426, 160 U. S. 435; Colliery Engineer Company v. United Correspondence Schools Company, 94 F.
152; Carte v. Evans, 27 F. 861. It fairly might be found also that the copyrights were taken out in the proper names.
One of them was taken out in the name of the Courier Company and the other two in the name of the Courier
Lithographing Company. The former was the name of an unincorporated joint-stock association formed under the
laws of New York, Laws of 1894, c. 235, and made up of the plaintiffs, the other a trade variant on that name.
Scribner v. Clark, 50 F. 473, 474, 475, S.C. sub nom. Belford v. Scribner, 144 U. S. 488.
Finally, there was evidence that the pictures were copyrighted before publication. There may be a question whether
the use by the defendant for Wallace was not lawful within the terms of the contract with Wallace, or a more
general one as to what rights the plaintiff reserved. But we cannot pass upon these questions as matter of law; they
will be for the jury when the case is tried again, and therefore we come at once to the ground of decision in the
courts below. That ground was not found in any variance between pleading and proof, such as was put forward in
argument, but in the nature and purpose of the designs.
We shall do no more than mention the suggestion that painting and engraving, unless for a mechanical end, are not
among the useful arts, the progress of which Congress is empowered by the Constitution to promote. The
Constitution does not limit the useful to that which satisfies immediate bodily needs. Burrow-Giles Lithographic Co. v.
Sarony, 111 U. S. 53. It is obvious also that the plaintiff's case is not affected by the fact, if it be one, that the
pictures represent actual groups -- visible things. They seem from the testimony to have been composed from hints
or description, not from sight of a performance. But even if they had been drawn from the life, that fact would not
deprive them of protection. The opposite proposition would mean that a portrait by Velasquez or Whistler was
common property because others might try their hand on the same face. Others are free to copy the original. They
are not free to copy the copy. Blunt v. Patten, 2 Paise 397, 400. See Kelly v. Morris, L.R. 1 Eq. 697; Morris v. Wright,
L.R. 5 Ch. 279. The copy is the personal reaction of an individual upon nature. Personality always contains
something unique. It expresses its singularity even in handwriting, and a very modest grade of art has in it
something irreducible which is one man's alone. That something he may copyright unless there is a restriction in the
words of the act.
If there is a restriction, it is not to be found in the limited pretensions of these particular works. The least
pretentious picture has more originality in it than directories and the like, which may be copyrighted. Drone,
Copyright 153. See Henderson v. Tompkins, 60 F. 758, 765. The amount of training required for humbler efforts
than those before us is well indicated by Ruskin.
"If any young person, after being taught what is, in polite circles, called 'drawing,' will try to copy the commonest
piece of real work -- suppose a lithograph on the title page of a new opera air, or a woodcut in the cheapest
illustrated newspaper of the day -- they will find themselves entirely beaten."
Elements of Drawing, first ed. 3. There is no reason to doubt that these prints, in their ensemble and in all their
details, in their design and particular combinations of figures, lines, and colors, are the original work of the plaintiffs'
designer. If it be necessary, there is express testimony to that effect. It would be pressing the defendant's right to
the verge, if not beyond, to leave the question of originality to the jury upon the evidence in this case, as was done
in Hegeman v. Springer, 110 F. 374.
We assume that the construction of Rev.Stat. § 4952, allowing a copyright to the "author, designer, or
proprietor . . . of any engraving, cut, print . . . [or] chromo," is affected by the act of 1874, 18 Stat. 78, 79, c. 301, §
3. That section provides that, "in the construction of this act, the words 'engraving,' 'cut,' and 'print' shall be applied
only to pictorial illustrations or works connected with the fine arts."
We see no reason for taking the words "connected with the fine arts" as qualifying anything except the word
"works," but it would not change our decision if we should assume further that they also qualified "pictorial
illustrations," as the defendant contends.
These chromolithographs are "pictorial illustrations." The word "illustrations" does not mean that they must illustrate
the text of a book, and that the etchings of Rembrandt or Muller's engraving of the Madonna di San Sisto could not
be protected today if any man were able to produce them. Again, the act, however construed, does not mean that
ordinary posters are not good enough to be considered within its scope. The antithesis to "illustrations or works
connected with the fine arts" is not works of little merit or of humble degree, or illustrations addressed to the less
educated classes; it is "prints or labels designed to be used for any other articles of manufacture." Certainly works
are not the less connected with the fine arts because their pictorial quality attracts the crowd, and therefore gives
them a real use -- if use means to increase trade and to help to make money. A picture is nonetheless a picture, and
nonetheless a subject of copyright, that it is used for an advertisement. And if pictures may be used to advertise
soap, or the theater, or monthly magazines, as they are, they may be used to advertise a circus. Of course, the
ballet is as legitimate a subject for illustration as any other. A rule cannot be laid down that would excommunicate
the paintings of Degas.
Finally, the special adaptation of these pictures to the advertisement of the Wallace shows does not prevent a
copyright. That may be a circumstance for the jury to consider in determining the extent of Mr. Wallace's rights, but
it is not a bar. Moreover, on the evidence, such prints are used by less pretentious exhibitions when those for whom
they were prepared have given them up.
It would be a dangerous undertaking for persons trained only to the law to constitute themselves final judges of the
worth of pictorial illustrations, outside of the narrowest and most obvious limits. At the one extreme, some works of
genius would be sure to miss appreciation. Their very novelty would make them repulsive until the public had
learned the new language in which their author spoke. It may be more than doubted, for instance, whether the
etchings of Goya or the paintings of Manet would have been sure of protection when seen for the first time. At the
other end, copyright would be denied to
pictures which appealed to a public less educated than the judge. Yet if they command the interest of any public,
they have a commercial value -- it would be bold to say that they have not an aesthetic and educational value -- and
the taste of any public is not to be treated with contempt. It is an ultimate fact for the moment, whatever may be
our hopes for a change. That these pictures had their worth and their success is sufficiently shown by the desire to
reproduce them without regard to the plaintiffs' rights. See Henderson v. Tompkins, 60 F. 758, 765. We are of
opinion that there was evidence that the plaintiffs have rights entitled to the protection of the law.
The judgment of the circuit court of appeals is reversed; the judgment of the circuit court is also reversed, and the
cause remanded to that court with directions to set aside the verdict and grant a new trial.
MR. JUSTICE HARLAN, dissenting:
Judges Lurton, Day, and Severens, of the circuit court of appeals, concurred in affirming the judgment of the district
court. Their views were thus expressed in an opinion delivered by Judge Lurton:
"What we hold is this: that if a chromo, lithograph, or other print, engraving, or picture has no other use than that of
a mere advertisement, and no value aside from this function, it would not be promotive of the useful arts within the
meaning of the constitutional provision, to protect the 'author' in the exclusive use thereof, and the copyright statute
should not be construed as including such a publication if any other construction is admissible. If a mere label simply
designating or describing an article to which it is attached, and which has no value separated from the article, does
not come within the constitutional clause upon the subject of copyright, it must follow that a pictorial illustration
designed and useful only as an advertisement, and having no intrinsic value other than its function as an
advertisement, must be equally without the obvious meaning of the Constitution.
It must have some connection with the fine arts to give it intrinsic value, and that it shall have is the meaning which
we attach to the Act of June 18, 1874, amending the provisions of the copyright law. We are unable to discover
anything useful or meritorious in the design copyrighted by the plaintiffs in error other than as an advertisement of
acts to be done or exhibited to the public in Wallace's show. No evidence, aside from the deductions which are to be
drawn from the prints themselves, was offered to show that these designs had any original artistic qualities. The jury
could not reasonably have found merit or value aside from the purely business object of advertising a show, and the
instruction to find for the defendant was not error. Many other points have been urged as justifying the result
reached in the court below. We find it unnecessary to express any opinion upon them in view of the conclusion
already announced. The judgment must be affirmed."
Courier Lithographing Co. v. Donaldson Lithographing Co., 104 F. 993, 996.
I entirely concur in these views, and therefore dissent from the opinion and judgment of this Court. The clause of
the Constitution giving Congress power to promote the progress of science and useful arts, by securing for limited
terms to authors and inventors the exclusive right to their respective works and discoveries, does not, as I think,
embrace a mere advertisement of a circus.
MR. JUSTICE McKENNA authorizes me to say that he also dissents.
——o0o——
U.S. Supreme Court
Burrow-Giles Lithographic Company v. Sarony, 111 U.S. 53 (1884)
111 U.S. 53
IN ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK
Syllabus
It is within the constitutional power of Congress to confer upon the author, inventor, designer, or proprietor of a
photograph the rights conferred by Rev.Stat. § 4952, so far as the photograph is a representation of original
intellectual conceptions.
The object of the requirement in the Act of June 18, 1874, 18 Stat. 78, that notice of a copyright in a photograph
shall be given by inscribing upon some visible portion of it the words Copyright, the date, and the name of the
proprietor, is to give notice of the copyright to the public, and a notice which gives his surname and the initial letter
of his given name is sufficient inscription of the name.
Whether a photograph is a mere mechanical reproduction or an original work of art is a question to be determined
by proof of the facts of originality, of intellectual production, and of thought and conception on the part of the
author, and when the copyright is disputed, it is important to establish those facts.
This was a suit for an infringement of a copyright in a photograph of one Oscar Wilde. The defense denied the
constitutional right of Congress to confer rights of authorship on the maker of a photograph, and also denied that
the surname of the proprietor with the initial letter of his given name prefixed to it ("N. Sarony") inscribed on the
photograph was a compliance with the provisions of the Act of June 18, 1874. 18 Stat. 78. The essential facts
appear in the opinion of the Court. The judgment below was for the plaintiff. The writ of error was sued out by the
defendant.
MR. JUSTICE MILLER delivered the opinion of the Court.
This is a writ of error to the Circuit Court for the Southern District of New York.
Plaintiff is a lithographer, and defendant a photographer, with large business in those lines in the City of New York.
The suit was commenced by an action at law in which Sarony was plaintiff and the lithographic company was
defendant, the plaintiff charging the defendant with violating his copyright in regard to a photograph, the title of
which is "Oscar Wilde, No. 18." A jury being waived, the court made a finding of facts on which a judgment in favor
of the plaintiff was rendered for the sum of $600 for the plates and 85,000 copies sold and exposed to sale, and $10
for copies found in his possession, as penalties under section 4965 of the Revised Statutes. Among the finding of
facts made by the court, the following presents the principal question raised by the assignment of errors in the case:
"3. That the plaintiff, about the month of January, 1882, under an agreement with Oscar Wilde, became and was the
author, inventor, designer, and proprietor of the photograph in suit, the title of which is 'Oscar Wilde, No. 18,' being
the number used to designate this particular photograph and of the negative thereof; that the same is a useful, new,
harmonious, characteristic, and graceful picture, and that said plaintiff made the same at his place of business in
said City of New York, and within the United States, entirely from his own original mental conception, to which he
gave visible form by posing the said Oscar Wilde in front of the camera, selecting and arranging the costume,
draperies, and other various accessories in said photograph, arranging the subject so as to present graceful outlines,
arranging and disposing the light and shade, suggesting and evoking the desired expression, and from such
disposition, arrangement, or representation, made entirely by the plaintiff, he produced the picture in suit, Exhibit A,
April 14, 1882, and that the terms 'author,' 'inventor,' and 'designer,' as used in the art of photography and in the
complaint, mean the person who so produced the photograph."
Other findings leave no doubt that plaintiff had taken all the steps required by the act of Congress to obtain
copyright of this photograph, and section 4952 names photographs, among other things, for which the author,
inventor, or designer may obtain copyright, which is to secure him the sole privilege of reprinting, publishing,
copying, and vending the same. That defendant is liable, under that section and section 4965, there can be no
question if those sections are valid as they relate to photographs.
Accordingly, the two assignments of error in this Court by plaintiff in error are:
1. That the court below decided that Congress had and has the constitutional right to protect photographs and
negatives thereof by copyright.
The second assignment related to the sufficiency of the words "Copyright, 1882, by N. Sarony," in the photographs,
as a notice of the copyright of Napoleon Sarony under the act of Congress on that subject.
With regard to this latter question, it is enough to say that the object of the statute is to give notice of the copyright
to the public by placing upon each copy, in some visible shape, the name of the author, the existence of the claim of
exclusive right, and the date at which this right was obtained.
This notice is sufficiently given by the words "Copyright, 1882, by N. Sarony," found on each copy of the
photograph. It clearly shows that a copyright is asserted, the date of which is 1882, and if the name Sarony alone
was used, it would be a sufficient designation of the author until it is shown that there is some other Sarony.
When, in addition to this, the initial letter of the Christian name Napoleon is also given, the notice is complete.
The constitutional question is not free from difficulty.
The eighth section of the first article of the Constitution is the great repository of the powers of Congress, and by
the eight clause of that section Congress is authorized
"To promote the progress of science and useful arts by securing for limited times to authors and inventors the
exclusive right to their respective writings and discoveries."
The argument here is that a photograph is not a writing nor the production of an author. Under the acts of Congress
designed to give effect to this section, the persons who are to be benefited are divided into two classes -- authors
and inventors. The monopoly which is granted to the former is called a copyright; that given to the latter, letters
patent, or, in the familiar language of the present day, patent right.
We have then copyright and patent right, and it is the first of these under which plaintiff asserts a claim for relief.
It is insisted in argument that, a photograph being a reproduction, on paper, of the exact features of some natural
object or of some person, is not a writing of which the producer is the author.
Section 4952 of the Revised Statutes places photographs in the same class as things which may be copyrighted with
"books, maps, charts, dramatic or musical compositions, engravings, cuts, prints, paintings, drawings, statues,
statuary, and models or designs intended to be perfected as works of the fine arts."
"According to the practice of legislation in England and America," says Judge Bouvier, 2 Law Dictionary 363, "the
copyright is confined to the exclusive right secured to the author or proprietor of a writing or drawing which may be
multiplied by the arts of printing in any of its branches."
The first Congress of the United States, sitting immediately after the formation of the Constitution, enacted that the
"author or authors of any map, chart, book, or books, being a citizen or resident of the United States, shall have the
sole right and liberty of printing, reprinting, publishing, and vending the same for the period of fourteen years from
the recording of the title thereof in the clerk's office, as afterwards directed."
This statute not only makes maps and charts subjects of copyright, but mentions them before books in the order of
designation. The second section of an act to amend this act, approved April 29, 1802, 2 Stat. 171, enacts that from
the first day of January thereafter, he who shall invent and design, engrave, etch, or work, or from his own works
shall cause to be designed and engraved, etched, or worked, any historical or other print or prints shall have the
same exclusive right for the term of fourteen years from recording the title thereof as prescribed by law.
By the first section of the Act of February 3, 1831, 4 Stat. 436, entitled "An act to amend the several acts respecting
copyright, musical compositions, and cuts, in connection with prints and engravings," are added, and the period of
protection is extended to twenty-eight years. The caption or title of this act uses the word "copyright" for the first
time in the legislation of Congress.
The construction placed upon the Constitution by the first act of 1790 and the act of 1802, by the men who were
contemporary with its formation, many of whom were members of the convention which framed it, is of itself
entitled to very great weight, and when it is remembered that the rights thus established have not been disputed
during a period of nearly a century, it is almost conclusive.
Unless, therefore, photographs can be distinguished in the classification of this point from the maps, charts, designs,
engravings, etchings, cuts, and other prints, it is difficult to see why Congress cannot make them the subject of
copyright as well as the others.
These statutes certainly answer the objection that books only, or writing, in the limited sense of a book and its
author, are within the constitutional provision. Both these words are susceptible of a more enlarged definition than
this. An author in that sense is "he to whom anything owes its origin; originator; maker; one who completes a work
of science or literature." Worcester. So also no one would now claim that the word "writing" in this clause of the
Constitution, though the only word used as to subjects in regard to which authors are to be secured, is limited to the
actual script of the author, and excludes books and all other printed matter. By writings in that clause is meant the
literary productions of those authors, and Congress very properly has declared these to include all forms of writing,
printing, engravings, etchings, etc., by which the ideas in the mind of the author are given visible expression. The
only reason why photographs were not included in the extended list in the act of 1802 is probably that they did not
exist, as photography, as an art, was then unknown, and the scientific principle on which it rests, and the chemicals
and machinery by which it is operated, have all been discovered long since that statute was enacted.
Nor is it supposed that the framers of the Constitution did not understand the nature of copyright and the objects to
which it was commonly applied, for copyright, as the exclusive right of a man to the production of his own genius or
intellect, existed in England at that time, and the contest in the English courts, finally decided, by a very close vote
in the House of Lords, whether the statute of 8 Anne, c.19, which authorized copyright for a limited time, was a
restraint to that extent on the common law or not, was then recent. It had attracted much attention, as the
judgment of the King's Bench, delivered by Lord Mansfield, holding it was not such a restraint, in Millar v. Taylor, 4
Burrows 2303, decided in 1769, was overruled on appeal in the House of Lords in 1774. Id., 2408. In this and other
cases, the whole question of the exclusive right to literary and intellectual productions had been freely discussed.
We entertain no doubt that the Constitution is broad enough to cover an act authorizing copyright of photographs,
so far as they are representatives of original intellectual conceptions of the author.
But it is said that an engraving, a painting, a print, does embody the intellectual conception of its author, in which
there is novelty, invention, originality, and therefore comes within the purpose of the Constitution in securing its
exclusive use or sale to its author, while a photograph is the mere mechanical reproduction of the physical features
or outlines of some object, animate or inanimate, and involves no originality of thought or any novelty in the
intellectual operation connected with its visible reproduction in shape of a picture. That while the effect of light on
the prepared plate may have been a discovery in the production of these pictures, and patents could properly be
obtained for the combination of the chemicals, for their application to the paper or other surface, for all the
machinery by which the light reflected from the object was thrown on the prepared plate, and for all the
improvements in this machinery, and in the materials, the remainder of the process is merely mechanical, with no
place for novelty, invention, or originality. It is simply the manual operation, by the use of these instruments and
preparations, of transferring to the plate the visible representation of some existing object, the accuracy of this
representation being its highest merit.
This may be true in regard to the ordinary production of a photograph, and that in such case, a copyright is no
protection. On the question as thus stated we decide nothing.
In regard, however, to the kindred subject of patents for invention, they cannot, by law, be issued to the inventor
until the novelty, the utility, and the actual discovery or invention by the claimant have been established by proof
before the Commissioner of Patents, and when he has secured such a patent, and undertakes to obtain redress for a
violation of his right in a court of law, the question of invention, of novelty, of originality is always open to
examination. Our copyright system has no such provision for previous examination by a proper tribunal as to the
originality of the book, map, or other matter offered for copyright. A deposit of two copies of the article or work with
the Librarian of Congress, with the name of the author and its title page, is all that is necessary to secure a
copyright. It is therefore much more important that when the supposed author sues for a violation of his copyright,
the existence of those facts of originality, of intellectual production, of thought, and conception on the part of the
author should be proved than in the case of a patent right. In the case before us, we think this has been done.
The third finding of facts says, in regard to the photograph in question, that it is a "useful, new, harmonious,
characteristic, and graceful picture, and that plaintiff made the same . . . entirely from his own original mental
conception, to which he gave visible form by posing the said Oscar Wilde in front of the camera, selecting and
arranging the costume, draperies, and other various accessories in said photograph, arranging the subject so as to
present graceful outlines, arranging and disposing the light and shade, suggesting and evoking the desired
expression, and from such disposition, arrangement, or representation, made entirely by plaintiff, he produced the
picture in suit."
These findings, we think, show this photograph to be an original work of art, the product of plaintiff's intellectual
invention, of which plaintiff is the author, and of a class of inventions for which the Constitution intended that
Congress should secure to him the exclusive right to use, publish, and sell, as it has done by section 4952 of the
Revised Statutes.
The question here presented is one of first impression under our Constitution, but an instructive case of the same
class is that of Nottage v. Jackson, 11 Q.B.D. 627, decided in that court on appeal, August, 1883.
The first section of the Act of 25 & 26, Vict. c. 68, authorizes the author of a photograph, upon making registry of it
under the Copyright Act of 1882, to have a monopoly of its reproduction and multiplication during the life of the
author.
The plaintiffs in that case described themselves as the authors of the photograph which was pirated in the
registration of it. It appeared that they had arranged with the captain of the Australian cricketers to take a
photograph of the whole team in a group, and they sent one of the artists in their employ from London to some
country town to do it. The question in the case was whether the plaintiffs, who owned the establishment in London
where the photographs were made from the negative and were sold, and who had the negative taken by one of
their men, were the authors or the man who, for their benefit, took the negative. It was held that the latter was the
author, and the action failed because plaintiffs had described themselves as authors.
Brett, M.R., said in regard to who was the author:
"The nearest I can come to is that it is the person who effectively is as near as he can be the cause of the picture
which is produced -- that is, the person who has superintended the arrangement, who has actually formed the
picture by putting the persons in position, and arranging the place where the people are to be -- the man who is the
effective cause of that."

Lord Justice Cotton said:

"In my opinion, 'author' involves originating, making, producing, as the inventive or mastermind, the thing which is
to be protected, whether it be a drawing, or a painting, or a photograph," and Lord Justice Bowen says that
photography is to be treated for the purposes of the act as an art, and the author is the man who really represents,
creates, or gives effect to the idea, fancy, or imagination.

The appeal of plaintiffs from the original judgment against them was accordingly dismissed.

These views of the nature of authorship and of originality, intellectual creation, and right to protection confirm what
we have already said.

The judgment of the circuit court is accordingly affirmed.

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